EEStor and ZENN: The (R)Evolution of the Automotive Industry
Introduction
Imagine a car that was whisper quiet at highway speeds, could go for hundreds of miles and left no trail of emissions behind. This car would never need to visit a gas station, and would top off its ‘tank’ within a few minutes.
The car is electric…and it’s powered by a revolutionary energy storage system: EEStor’s EESU (Electrical Energy Storage Unit). To put this into perspective, imagine a car that enabled guilt-free driving, eliminated dependency on foreign oil and that completely changed transportation as we know it.
When ZENN Motor Company was founded in 2000, it was with the ultimate goal of addressing the escalating climate crisis by bringing electric cars to the masses. EEStor’s EESU is the tool that will enable the realization of that goal. It is an ultra-capacitor storage device that acts like a ‘super’ battery for transportation and other applications. There is an enormous amount of interest regarding this technology, especially given that Lockheed Martin has secured an exclusive technology agreement to use EEStor’s EESU in military and homeland security applications. Kleiner Perkins Caufield & Byers, a leading venture capital firm also took a financial interest in EEStor, and Fortune Small Business Magazine has identified EEStor and ZENN Motor Company as one of “The Disruptors” to watch in the coming year.
In anticipation of the EEStor technology being successfully commercialized, ZENN Motor Company is readying its plans to incorporate the technology in its product offerings. The Company’s primary market strategy for highway capable transportation will be through broad distribution of its ZENNergy™ drive, an electric drivetrain solution, powered by EEStor and integrating third party and proprietary technologies being developed by the Company. ZENNergy™ drive solutions, powered by EEStor’s energy storage technology are expected to enable OEM and Tier 1 partners to deliver advanced electric transportation solutions to their customers. Two of the more promising opportunities being examined are retrofit kits and a small to mid-size automobiles (curb weight less than 3000 lbs/1400 Kg) with highway capable speeds and range. The retrofit kits would be designed for mass conversion of specific existing automobiles from internal combustion to electric drive train.
EEStor Background
EEStor was founded in 2001 by Richard D. Weir and Carl Nelson, former senior managers in disk-storage technology at IBM and Xerox. The Company maintains a low profile, but others in the automotive and CleanTech communities are calling their storage technology ‘game changing’. Such a breakthrough has the potential to transform the energy sector and the automobile industry in particular.
The following table provides a comparison of specific features of current power storage technologies with EEStor’s claims relating to the EESU:
Technical Specifications: EEStor (EESU) vs. other Battery Technologies
Ceramic EESU
- Weight = 135 kg
- Volume = 73625 (cubic centimetres)
- Discharge rate = 0.02% / 30 days
- EV Charging time (full) - 100% charge = 3-6 min
- Life reduced with deep cycle use = None
- Hazardous Materials = None
- Temperature effect on energy storage = Negligible
NiMH
- Weight = 780 kg
- Volume = 293015 (cubic centimetres)
- Discharge rate = 5% / 30 days
- EV Charging time (full) - 100% charge = >3.0 hr
- Life reduced with deep cycle use = High
- Hazardous Materials = Yes
- Temperature effect on energy storage = High
LA (Gel)
- Weight = 1655 kg
- Volume = 705380 (cubic centimetres)
- Discharge rate = 1% / 30 days
- EV Charging time (full) - 100% charge = 3-15 hr
- Life reduced with deep cycle use = Very High
- Hazardous Materials = Yes
- Temperature effect on energy storage = Very High
Lithium-ion
- Weight = 340 kg
- Volume = 93360 (cubic centimetres)
- Discharge rate = 1% / 30 days
- EV Charging time (full) - 100% charge = >3.0 hr
- Life reduced with deep cycle use = High
- Hazardous Materials = Yes
- Temperature effect on energy storage = High
(Source: EEStor Inc.)
(1)If market demands require larger or smaller models, these, too, can be produced.
Technology Agreement Details
ZMC entered into an initial agreement with EEStor dated August 24, 2004 (with subsequent amendments dated November 26, 2004, September 30, 2005, August 8, 2006 and January 22, 2007) to acquire in perpetuity the worldwide exclusive rights to use EEStor’s EESU in the following markets:
New 4-wheeled passenger vehicles with a curb weight of up to 1,400 kilograms, net of battery weight (this does not include vehicles that are classified as Sport Utility Vehicles, Pickup Trucks, Trucks, Trams, Buses and certain high-performance sports cars);
For Low-Speed Vehicles, golf carts and similar-styled utility vehicles and;
The aftermarket conversion to ZENNergy™ drive of any 4-wheel vehicles that utilize internal combustion, electric, (or a combination thereof) drive systems and have been licensed for road use for more than one year
All-electric 4-wheeled personal transportation uses for vehicles with a curb weight up to 1,400 kilograms, net of the battery weight, and
For golf carts and similar-styled utility vehicles, and
The aftermarket conversion of any internal combustion passenger vehicle to electric drive
The EEStor Technology Agreement also provides ZMC with non-exclusive, worldwide rights to manufacture higher horsepower and heavier vehicles. As provided for in the Agreement, ZMC’s rights to the technology are subject to making in aggregate, milestone payments of US$2,500,000.
To date, ZMC has made three milestone payments totaling US$1,300,000:
US$100,000 initial investment made in October 2005
US$650,000 upon financing made in January 2006
US$550,000 investment based on EEStor reaching the purity testing/production capacity milestone made in February 2007. This milestone included third-party verification of EEStor producing barium nitrate power meeting specified levels of purity.US$650,000 upon financing made in January 2006
The balance of amounts payable under the Agreement total US$1,200,000:
-
US$700,000 is payable upon third party verification of permittivity testing.
US$500,000 is payable upon the receipt of the EESU by ZMC
ZENN Equity Investment in EEStor
On April 30, 2007, the Company completed an equity investment in EEStor. The Company acquired a 3.8% interest for a cash investment of US$2,500,000 plus costs. The terms of the investment provide the Company with a right, exercisable at its sole discretion, to invest at the same price per share for an additional up to US$5,000,000 within 30 days of EEStor announcing its permittivity test results meeting the predetermined parameters and verified by an independent third party. The Company’s maximum additional investment is subject to reduction depending on the investment participation of other EEStor shareholders in the raise. Should the other EEStor shareholders exercise their maximum investment, the Company’s additional investment would be limited to US$2,000,000. If the Company elects to maximize its additional investment and subject to the investment decisions of the other EEStor investors, the Company’s total minimum and maximum equity interest in EEStor would be in the range of approximately 6.2% to 10.5%.
While the Company has specific technology rights under the Agreement noted above, the investment was made to provide ZENN shareholders with participation in the potential upside of other applications of EEStor’s technology and is unrelated to the terms of the Technology Agreement.