Exro and Linamar Corporation sign definitive agreement to serially produce and commercialize the parties' integrated electric beam axle product for Class 3-6 vehicles:
The agreement is set for an initial five-year term and follows successful continued testing and validation by Linamar of the Exro Coil DriverTM product samples delivered in Q4 2022
In accordance with the agreement, by Q4 2023 the parties intend to build a product demonstration vehicle to be utilized as a joint marketing asset for the medium duty commercial vehicle market
The agreement contemplates the start of series production by Q4 2024 and includes annual commercial volume targets that build to 25,000 units per annum by 2027
Linamar is granted exclusivity to Exro's Coil DriverTM product for use in medium duty Class 3-6 electric beam axle applications
Exro Technologies Inc. (the "Company" or "Exro"), a leading clean-technology company that develops new generation power-control electronics that expand the capabilities of electric motors and batteries, is pleased to announce the signing of a definitive commercialization agreement ("DCA", or "agreement") with strategic partner, and global tier-1 automotive supplier, Linamar Corporation (TSX: LNR) ("the Parties"). The agreement follows successful testing and validation by Linamar of the Parties' co-developed integrated electric axle ("eAxle") utilizing Exro's Coil DriverTM traction inverter and signals a commitment by the Parties to commercialize the product for multi-year series production.
Approximately two years ago, Exro and Linamar established a goal to co-develop a next-generation eAxle utilizing Coil Driver™ technology. In a traditional powertrain, the motor and inverter are in separate housings on the vehicle chassis. An eAxle combines an electric vehicle's motor, gears, and inverter into the drive axle of the vehicle, providing fleets an opportunity to reduce maintenance requirements and energy consumption, while also reducing costs and complexity. In Q4 2022, Exro supplied 800V Coil Driver™ inverter samples designed for integration into Linamar's eAxle program. Following successful continued testing of the samples by Linamar through the first half of 2023, the Parties have progressed to a definitive agreement intended to commercialize the co-developed eAxle into series production.
"Having worked closely for the last two years, we've witnessed the progressive evolution of Exro's technology," said Kevin Ledford, Global Vice President of Electrification (eLIN) at Linamar. "By integrating Exro's technology into Linamar's full eAxle system, we aim to offer a cost-effective 4-in-1 eAxle which will reduce the integration complexity to our customers as well as offer superior performance to the medium duty truck market beginning in late 2024."
"We are thrilled to achieve this next major milestone with Linamar," said Exro CEO Sue Ozdemir. "The signing of the definitive agreement demonstrates steady progress with a leading tier-1 OEM supplier, further validates the potential of our technology, and signals to shareholders an opportunity for a material increase in production volume in the years ahead. Linamar has been a great partner and we look forward to advancing this combined product to commercialization."
The agreement is set for an initial five-year term with the Parties committing to milestones and commercial volume targets. In accordance with the agreement, by Q4 2023, the Parties intend to build a demonstration vehicle containing the eAxle product to be utilized as a joint marketing asset for commercial vehicle customers. The Parties have committed to investing in their various areas of responsibility in accordance with the agreement, with the intention of beginning series production of the eAxle product to support customer deliveries beginning in late 2024. To this end, Exro will be investing in finalizing its printed circuit board (PCB) manufacturing and beginning the capital expenditures for a final assembly line. Linamar has been granted exclusivity on Exro's Coil DriverTM inverter for use in medium duty Class 3-6 electric beam axle applications. Exro maintains the ability to supply its technology for eAxle products in the Class 1-2 passenger vehicle market, as well as the Class 7-8 heavy duty vehicle market. Of note, the Linamar partnership is Exro's only contemplated eAxle platform for Class 3-6 vehicles. Exro maintains non-exclusivity across all its direct drive Coil DriverTM partnership applications. The direct drive partnerships include customers such as SEA Electric, Vicinity, and others where the powertrain utilizes a motor and inverter direct drive system versus an eAxle. The agreement does not place exclusivity restrictions on Linamar, which will continue to work with other vendors and suppliers to meet its customers' application-specific requirements.