American Electric ready for next level

A Palmer Lake battery company is transforming itself into an electric vehicle design shop in hopes of grabbing a share of the fast-growing industry.

American Electric Vehicles has already developed and designed an electric “micro-bus” that it hopes will catch on with schools and others.

AEV says it has the technological know-how, the product and even market. Now all it’s lacking is investor money and the business savvy to take its designs to market.

The company has been working for the past two years on its buses, 12 of which have been sold to customers in China. Its bus is, in fact, manufactured in China, though the technology and design work was done in Palmer Lake.

AEV got its start when its founder, Dr. Dan Rivers, developed an electric car that competed in the Pikes Peak International Hill Climb.

Rivers, who previously worked at General Motors, has spent a lot of time developing lithium ion batteries for cell phones and laptops. He has sold the same battery technology to power vehicles such as the new Chevy Volt and unmanned drones for the U.S. Air Force.

With his latest project, he wanted to do something different: design an entire electric vehicle, not just the battery.

Rivers and his staff of 16 designed and developed nearly every part of its new electric bus. They replaced the motor and drive chain with electric parts, and in place of the gas tank, they installed their new electric battery pack.

“We looked at a number of platform designs – delivery vans, cars, three-wheelers – and we selected this type of electric shuttle,” said Chris Groesbeck, business development director. “We think this is the niche, the very first area, that people will see use of electric vehicles.”

The micro-bus could be used in place of delivery trucks or school buses, he said. The Post Office is a potential customer.

“Locally, we want to talk to Fort Carson or the Air Force Academy,” Groesbeck said. “Anyone that has a specific route to drive every day – this would be perfect for them.”

Specific routes are important because the electric buses will only go about 100 miles before the batteries need to be recharged, which takes about two hours.

Each bus costs about $80,000, the same price as a diesel-fueled bus. The economic advantage of the electric bus is that users will pay an annual energy fee to AEV, which is expected to be much less expensive than gasoline.

Though confident about their design and technology, the AEV team is under huge competitive pressure. Time is running out, Groesbeck said, to gather the funding it needs to beat others to market.

“This is the pivotal year for us,” he said. “We’re going to focus on getting partners to move to the next level. That’s really what we’re looking for – someone to say, hey, this is what you need to do, someone who has built a business.”

The company has received $2 million in venture capital from Asian markets, he said, but had no success locally in attracting money. Five of its buses will soon be shipped here from China. By the time they arrive, sometime in the next couple of months, AEV hopes to have found a partner to make the sales pitch.

“We focus on development and commercialization here,” Groesbeck said. “We’re not a manufacturing company and we’re not really a sales company. We need partners for that. They could sell the buses, and we could collect royalties.”

While the company is searching for partnerships, it also is interested in creating more electric vehicles.

“The founders really believe that electric vehicles are relevant to the market,” he said. “And now is the time – the price on electric cars is going to really drop in the next two years and they’re going to become more accessible.”

The primary reason that electric cars are so expensive is because it’s costly to manufacture the lithium ion batteries. But in the past few years, Asian and U.S. markets have started mass-producing the batteries. That’s going to make a big difference.

Analysts estimate that the electric car market could grow to 22 percent of the total car market in the next 10 years. Groesbeck said companies with large fleets will be the first to make the switch.

“FedEx has already examined it, done the studies, and they say they could replace 60 percent of their fleet with electric vehicles,” he said.

So, with the opportunity present, the company just needs help in connecting the dots.

“If we could find someone who built their own tech company, that’s the kind of partner we need right now,” Groesbeck said. “Someone who can help us find the right sellers for our product.”