May 28, 2023

Exro Technologies on making EV motors smarter, through next generation power electronics


It’s a revolution!

If you believe the pundits, the internal combustion engine will be replaced in short order by electric vehicles (EV)…that’s if you believe the pundits. BUT we can safely assume that the trend towards EVs is unstoppable.

Exro Technologies Inc. (TSXV: EXRO | OTCQB: EXROF) is working to make sure that happens. But it turns out, it’s not as easy as you thought. Just like the evolution of the internal combustion engine, electric motors also need to evolvethank goodness for technology.

Remember when cars used to have a carburetor? Darned things too…carburetor jets, bowl floats, one or two barrels etc. And how did you get better performance? You put on a bigger carburetor! Or two. Or more, all leading to way better performance but other complications (ask me how I know…). Then technology saved us and the same engine from the 1980s that received digital computer control (fuel injection etc.) now gets 30% or better fuel economy more horsepower and all sorts of adaptive gewgaws to make driving even more fun, or economical or whatever you need it for.

Surprisingly, the electric motor for transportation also needs a similar technology evolution. The basic design (still valid) of 100+ years ago can be improved and Exro is doing it. The company has been granted 17 patents with another 18 patents pending, so this team clearly knows what they are doing.

What is it? Exro makes electric motors smarter, through next generation power electronics. The company has developed a new controller that they call the “Coil Driver”. It dynamically enables a single electric motor to have multiple power settings using patented hardware and software. In real-time, measuring torque demand, one motor is now two different motors in the same case. The Coil Driver can automatically select the appropriate configuration so that torque demand and efficiency are optimized. A single motor can repeatedly change configurations on-the-fly and under demand to optimize performance at low speed or high speed. This is instead of having two motors for low or high-speed applications, gearboxes or other expensive technologies.

Wherever electric motors are used, this technology is applicable. It can be as small as scooters/e-bikes to electric busses and long-haul trucking (large) and everything in-between. The company has entered into eight commercial partnerships with leading companies in all of these segments. Imagine, a high-performance electric motorcycle, or an electric snowmobile. These are just two examples of end users of the technology, as the company continues to move forward with proof of concept across all segments. A widely anticipated application will be for use in EVs – the Coil Driver for an electric vehicle in Mexico City is expected soon.

Exro became public through a reverse takeover in 2017 and recently moved to the TSX Venture Exchange (TSXV). The company also raised new equity in July 2020, so the Company is funded for future development costs and ongoing R&D. While the immediate focus is transportation related, Exro is also making significant strides in battery management technology and generator technology. Generators are just like electric motors and can be similarly optimized to gain efficiency and performance, particularly in wind turbines. Thirdly, the company can use its intelligent energy management to improve battery technology to manage the charge and discharge levels of every cell in a battery pack. Using continuous adjustments, this will provide for a more efficient and longer life span, particularly given the concern for battery life and replacement (and recycling) in EVs.

The company currently expects to be EBITDA positive in the second half of 2023. It currently has a market capitalization approaching C$300 million, although this has seen a near-double as the company has had some positive news in the past two months. While it is too early to say that this is the company to own in your portfolio, management strives to be best-in-class through disruptive technology, perpetual innovation and a focused mission for intelligent electrification. They have clearly figured out electricity and multiple commercial partnerships with global corporations in everything from e-bikes to buses and long-haul trucks makes them the one by which all others will be measured.

Disclaimer: The author of this post may or may not be a shareholder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review their public documents to conduct your own due diligence. To access the disclaimer and other important legal notices, click here.

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