By Philippe Crowe


Political winds have blown against some federal funding being approved for advanced-tech startups, and as it turns out, China is picking up the slack as a financier for electric vehicle companies originally based in the U.S.

A few companies have looked to this Asian country after their funding request was rejected by the U.S. Department of Energy – and some, according to Alysha Webb's ChinaEV Blog, went straight to China for funding, without bothering to apply with the DOE.

One of these is Michigan-based Protean Electric Inc. which produces a versatile in-wheel motor for pure EVs or PHEVs that prompts CEO Bob Purcell to boldly say, “we are the fastest path to high volume application of hybrid systems in the world.”


Believing their business case was strong from the get-go, Purcell said Protean went directly to private investors.

Some of these, looking for proven – or at least well developed and engineered technologies – happened to be in China.

On July 9, Protean announced it had received $84 million in new funding from GSR Ventures, New Times Group, Oak Investment Partners and the city of Liyang, Jiangsu Province, China. This capital will be used to bring Protean's breakthrough electric drive technology to production by establishing manufacturing facilities in Liyang.

This funding is led by GSR Ventures, a venture capital firm based in Beijing and Silicon Valley. They are joined by the New Times Group, a Liyang-based industrial group. Oak Investment Partners, Protean's first venture investor, is also participating in this round of funding. The city of Liyang is partnering to provide prototype manufacturing support, with favorable industrial policy.


With the help of this infusion of cash, Protean Electric will begin prototype motor production early next year in China; volume production is expected in 2014, and indeed, as Webb notes, the Chinese offer more than just money, they offer a huge potential market.

“The general frame on all of this is you want to launch the technology in the market that has the most real demand potential,” Purcell said. “The Chinese government for some years now has expressed a very strong industry in moving to electric based technologies. I give the policy makers a lot of credit for passing policies to promote the major components inside of China.”

What those policymakers want is Protean Electric's Protean Drive, a fully integrated, water-tight, in-wheel direct-drive motor that Protean developed and manufactures.

To prove the concept, the company has developed multiple demonstration vehicles, including a Ford F150 pick-up truck, Volvo C30, Vauxhall Vivaro cargo van, Guangzhou Automobile Company Trumpchi, and BRABUS full electric and hybrid vehicles, based on the Mercedes-Benz E-Class, and were featured at the 2011 Frankfurt Motor Show.


Features of Protean Electric's in-wheel motors include:

• Fuel economy improvements up to 30 percent depending on battery size

• Highest torque density of any of today's leading electric propulsion systems

• 81 kw (110 horsepower) and 800 Nm (590 pound-feet torque) in each motor

• Weight of only 31 kg (68 pounds) per motor

• Fits within the space of a conventional 18- to 24-inch road wheel

• Superior regenerative braking capabilities, which allow up to 85 percent of the available kinetic energy to be recovered during braking

If you watched Automotive Engineering's video, you'll see there are tradeoffs for a hefty 68-pound wheel weight on at least two, if not four wheels. The obvious downside is this is a whole lot of unsprung weight. The upside is this unsprung weight can be managed with proper suspension engineering – and, it allows performance tuners to do such things as engineer a car for four-wheel vectoring.

Another issue Webb brought up is the ever present threat of intellectual property loss by tech strong, cash weak Americans who think to saddle up with Chinese who will in time have full access to what could be kept as trade secrets.

To this, whether right or wrong, Dan Squilller, CEO of PowerGenix was quoted as saying “When you get married to somebody you don’t go into it expecting the person to cheat.”

Yes, but, cheat they may.

As for Proteans's Purcell, he said he has had powertrain managerial experience in China for GM, and said the trick is partnering with quality associates who have a vested interest in protecting intellectual property also.

Yes, and there is risk here as well, no doubt, but then there's that initial $84 million and huge upside potential ...

And interestingly enough, while the Chinese are more motivated, better funded, and have the political will to welcome high-tech startups with cash and favor in their markets, they could offer a back-handed blessing to the U.S. in time.

In her article, Webb pointed out none of the Chinese-benefited companies she spoke with had been tested to the point of having high-volume production. As such, assuming Protean or another company so funded succeeds, U.S. firms can also buy their technology later, so by her reckoning China is actually doing the U.S. a favor by taking chances the U.S. government is now less than willing to.

On this question too, we shall see ...

In any event, Protean seems to be keeping goals realistic. Purcell told Webb the company is aiming to produce 100,000 motors annually. When you consider each vehicle will incorporate between two and four of those in-wheel electric motors, one quickly understands Protean expects to take it step by step.

Alysha Webb's ChinaEV Blog