Rapid Electric Vehicles Inc.

Rapid Electric Vehicles Inc.

September 13, 2010 09:04 ET

Rapid Electric Vehicles Inc. and the Toronto Atmospheric Fund Create 'Battery Breakthrough'

Partnership to Enable a Breakthrough Business Model That 'Cracks the Code' for the Converging Automotive and Energy Industries

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 13, 2010) - Rapid Electric Vehicles Inc. (REV) signed a non-binding Memorandum of Understanding (MOU) with the Toronto Atmospheric Fund (TAF) last week to create a new company focused on enabling the widespread adoption of electric vehicles.

High prices have been a barrier to the rollout of electric vehicles, especially within public and private fleets. While many believe prices will decline with advances in new technology and economies of scale, both are stunted by the classic 'chicken and egg' problem. High upfront prices for lithium battery packs- the system that stores vast amounts of electricity for the car and replaces conventional fuel- are perpetuating the inertia that would otherwise propel the industry forward.

Many fleet owners and operators have voiced strong interest in electric vehicles that promise significant monetary savings and predictability. However, the reality is that many simply can't afford them due to the high initial cost of the batteries, which can sometimes double the price of the car.

Signaling a major advance for the electric vehicle industry, TAF has agreed to finance a subsidiary company with REV that will drive a fleet-focused strategy that takes the high capital cost of the battery out of the equation for electric vehicle buyers.

In North America there are some tens of millions of passenger fleet vehicles on the road everyday, averaging 13 miles per gallon. Owned for as long as 15 years, volatile fuel costs and emissions-based penalties are known to plague fleet operations.

"We've heard the same thing again and again from fleet managers at all levels of government including municipal and utility stakeholders," says REV's CEO Jay Giraud. "High battery prices are the only obstacle for them. Paying for the battery upfront is like buying five years of fuel right now. So like fuel, the battery needs to be a consumable, not a commodity."

The soon-to-be named new company will own the battery pack and rent them on five and ten-year terms, bringing the price of the electric vehicle as low as par with the conventional alternative. This enables fleets to shift the focus of their current capital budgets away from conventional trucks and safely invest in electrical vehicles, batteries not included.

"When we buy our trucks we know how long we're going to own them for, and we know how many miles we'll put on them," according to Gerry Pietschmann, Toronto's Fleet Manager. "The risk we take when we buy a gas-powered truck is not knowing what will happen with fuel prices tomorrow, which can wreak havoc on budget planning. An even monthly payment on a battery that eliminates emissions from the tailpipe would take care of that, and of course would help us be more fiscally responsible at the same time."

Using proprietary wireless technology developed by REV, the new company will be able to monitor its battery assets remotely, ensuring their useful life is managed and optimized and goes beyond the duration of the rental term. With REV's combined technology and business model in place, government-owned electric vehicles can be used to store and return energy to the electricity grid without worry to long-term battery performance and life, thereby improving power reliability to homes and buildings, and reducing the chance of power failures.

"The Toronto Atmospheric Fund supports new solutions that improve efficiency and reduce carbon output for its city, and the time is now for fleets to move on this," says TAF's Associate Director Tim Stoate. "After last year's economic collapse, no one can afford another crippling spike in fuel prices. REV's approach is a leading edge business and technology solution that can steer us away from liquid fuel sources and at the same time instantly respond to changes in supply and demand to balance our power grid. That makes this a game changer. So to assist us in bringing this solution to market, we're inviting other institutional debt or equity capital to participate. This model has already been proven with solar. 75% of solar arrays are sold as a service. This is the obvious next step for cars, starting with fleets."

Two weeks ago REV announced that it created a new class of vehicle called the APV, or Ancillary Power Vehicle. APV's are designed to respond to wireless signals and act as energy storage infrastructure on the power grid. Presently, REV has several units in production, four of which are scheduled for delivery to REV's first APV customer, Honeywell Aerospace and the US Military. As part of an advanced micro-grid program, the APV technology suite will be deployed and tested at the Wheeler Air Force base in Hawaii this Fall.

About REV:

Rapid Electric Vehicles, a Vancouver-based company, develops and delivers high-performance electric vehicles for North American fleets. REV specializes in vehicle-to-grid networks and bi-directional energy storage systems that support renewable energy production and a reduction of dependence on carbon-intensive sources.

About Toronto Atmospheric Fund:

The Toronto Atmospheric Fund is a leader in developing cutting-edge climate solutions. TAF turns ideas into action, nurtures new approaches, and clears the way for the wider adoption of critically needed new programs, policies and technologies. TAF uses its own endowment to support community and City actions that will help Toronto reach its climate targets. For almost 20 years, TAF has helped make Toronto an international leader in climate action.

If you'd like more information or to schedule an interview with Jay Giraud please contact Gabrielle by phone 604.568.5195 or email gabrielle@rapidelectricvehicles.com.

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