Sue Ozdemir on Delivering "Next Gen" Electric Motors and Powertrains | #HashtagFinance

CSE's Anil Mall chats with Exro Technologies Inc. (CSE:XRO) CEO Sue Ozdemir about their strategy to commercialize its proprietary technology through strategic partnerships for specific near-term market opportunities.

Here's an overview of what they cover in this podcast:

01:32 - Making electric motors smart with power electronics.
4:12 - A new type of inverter - intelligent coil driver.
5:43 - Positioned in the $100Bn global electric vehicle market.
8:01 - Sue’s background in the electric motor business, including GE Motor Division.
12:10 - Partnership 1 - Potential to retrofit combustion engines with electric engines.
15:23 - Partnership 2 - Clean Seed Capital to co-develop electric seeders.
16:38 - Partnership 3 - Working w/ Zero Motorcycle, the top manufacturer of electric motorcycles.
17:11 - Partnership 4 - Sea Electric to develop an electric delivery van and co-developing a garbage truck for NA market.
21:18 - The approach to engaging new partners.

Exro is a Clean Tech company that has developed a new class of control technology for electric powertrains. Exro’s advanced motor control technology, their “Coil Driver”, expands the capabilities of electric motors and powertrains. The Coil Driver enables two separate torque profiles within a given motor. The first is calibrated for low speed and high torque, while the second provides expanded operation at high speed. The ability to change configuration allows efficiency optimization for each operating mode, resulting in overall reductions in energy consumption. The controller automatically and seamlessly selects the appropriate configuration in real-time so that torque demand and efficiency are optimized.

The limitations of traditional electric machines and power technology are becoming more evident. In many increasingly prominent applications, traditional methods cannot meet the required performance. This means either oversizing the equipment, adding additional motors, or implementing heavy mechanical geared solutions. Exro offers a new solution for system optimization through implementation of its technology which can yield the following results: increased drive cycle efficiency, reduced system volume, reduced weight, expanded torque and speed capabilities. Exro allows the application to achieve more with less energy consumed.

Related links
https://www.exro.com/
https://thecse.com/en/listings/technology/exro-technologies-inc

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Transcript

Speaker 1: 0:00

Hey, it's James here welcoming you to this presentation of the hashtag finance podcast. This is just a reminder that if you like video, all of our CEO and expert interviews are featured on the hashtag finance playlist on CCTV, including the show that you were about to listen to remember that a CSC space TV on YouTube. And finally, this is just a friendly reminder that the views information or opinions expressed during the podcast are solely those of the individuals involved and do not necessarily represent those of the Canadian securities exchange and its employees. So happy listening, and now enjoy the show. This is hashtag finance presented to you by the Canadian securities exchange the exchange for entrepreneurs with your host Neil mall. Welcome to another episode of hashtag finance today. I'm talking to Sue[inaudible]. Sue is the CEO of X X road technologies, which is a CSE listed company. Sue, welcome to hashtag finance. How are you? I'm doing good as a, um, everything considering this time of the year being summer, as well as being in the middle of a pandemic. I hope you and your family are keeping well and your team.

Speaker 2: 1:19

Yep. We're all doing very, very well. Okay.

Speaker 1: 1:22

So why don't we begin? Um, we've obviously never hosted you on hashtag finance. So why don't we start by you talking to our viewers and listeners about extra and what is it that you guys do? What's the vision?

Speaker 2: 1:35

Perfect. Um, so we have technology that we like to call a new, a new category into the power electronics market. So what we have is a new type of power electronics called a coil driver, just smart, intelligent coil driver, and it would replace the traditional inverter inside of a powertrain. So I love to say we make electric motors smarter through the power electronics.

Speaker 1: 1:58

Uh, that's a nice little summary to what you guys do. Um, how have you guys been doing this pandemic? Let's start off with that.

Speaker 2: 2:08

So we've actually been doing really well. I'm really proud of the team that surrounds me they've they all came together, you know, right at the beginning, when we had kind of, you know, real strict lockdown, we worked out some remote ability to be able to test remote and teamed up in teams of two to be able to continue to work. So we didn't see anything too much slowing us down here in Calgary. We opened up, uh, you know, towards the beginning of June, I believe it was. So our team has been working out of the office for about two and a half months. Now we have a great space. I'm very fortunate that our space we're able, you know, we've our own entry doors. We've got lots of space to social distance. Um, so we're enjoying, you know, being together, but I'm still being able to stay apart from each other. So it's been, it's been really good, um, from a work perspective, um, we, we took it a little differently. We decided that, you know, it's job to continue to do the path that we put out in front of our shareholders to keep executing just like we had planned and, you know, we'd have delays and we'd have other things, but as a, as a leadership team, not just meant, we had to be a little smarter about how we did it. So we've just been pushing along and we've actually found, you know, like, I'm sure you've found a lot of people are available. So we've been spreading the word talking to a lot of people and we're pretty excited about where the rest of the year will take us.

Speaker 1: 3:27

Absolutely. Like you mentioned, you know, it's been, it's been a long one for everybody and everyone seems to be in front of a computer having time to be able to find out about these companies and stuff like that. For us in general, you know, these podcasts normally would be, would be face to face either you were in Vancouver. I was in Calgary or we met up at a conference where we did these, but, you know, um, technology has been a big player and a big help to all of us moving, um, keeping our businesses going to say, so you guys have been well, um, uh, continuing with your business 2019 was a huge year for you guys. Um, you know, proving your technology. And then obviously going into 2020, we all ended up with this pandemic or in the pandemic, I should say. Um, uh, you guys have a foundational dynamic power management system is what you guys call it. Do you want to maybe talk to us about what that is?

Speaker 2: 4:22

Right. So we've done some rebranding it's still ongoing. So we've had a couple of releases where we talk to the fact that we'll be going under some rebranding. So we do still internally call it a dynamic management system, but really what, what we're, what we're doing is making a new type of inverter. So we call it an intelligent coil driver. And that name comes from the fact that what we're utilizing is a physics of electric motors called coil switching. We didn't invent coil switching that, like I said, that's the physics of electric motors. What we did was made it intelligent and put it into the 21st century. So we've called that our coil driver. Um, we have a battery management system that falls under the same type of concept that's coming out of a proof of concept this year. All of that. When you put that together, we were calling it our dynamic management system where we've kind of been going with our branding, um, is, you know, we, we stand our mission is to use minimum energy for maximum results. So everything that we do is being smart with energy consumption, and we're really passionate about changing the way the world looks at energy consumption and the 21st century being able to kind of help to make that transition so you can get the performance you need, but do it in a smart way.

Speaker 1: 5:41

Got it. I know, I know I'm looking up some stats of global electric vehicle market where I think it's close to a hundred billion annually. Um, they say it's forecast to grow, I think, close to half a trillion over, uh, by I think 20, 25. But if I'm not mistaken, where do you, where is actual position within that ecosystem?

Speaker 2: 6:04

It's, it's a staggering market. Um, we've been doing our best to try to stay focused on continuing, to put out a few more proof of concepts this year that will allow us to be able to cover 85% of the traction motors that are in the mobility industry. We are completely versatile, so we can play in anything from a two wheel electric bicycle to a bus. Um, it's really more about the power rating of course, so that we have enough to be able to test it, but it's more about the type of torque, but the application has. So we really need an application that requires a, a wide torque range. So you want to have a lot of torque while you're maintaining your speed or with speed when we have that need and combination, what happens is currently on the market, those electric vehicle manufacturers, what they're doing is compensating. So they have one motor for that low end torque, and then another motor for that high end speed or alternatively like with the new[inaudible], they'll use a heavy, mechanical to speed gearbox by utilizing our technology. You'd be replacing the existing inverter, getting all those features that an inverter traditionally delivers to the molder in the powertrain, but you'd be adding electric gearing inside of the power electronics. So we, we believe we're first to market. Um, and so there's, it really doesn't matter to us. We, and, and it also doesn't matter. We can do battery electric, we can do hybrid, we can do fuel, uh, hydrogen fuel cell, as long as there's a motor inside the powertrain. It's a good application for us.

Speaker 1: 7:38

So it's very scalable. Then it would be fair to say, we can go from, you know, the smallest motor to the biggest one.

Speaker 2: 7:44

Yeah, there's a, you know, absolutely. There's a, there's a couple of platforms, sizes that we customize off. Every time we do a powertrain, so there's about four to five sizes, but it is completely scalable and it's, you know, we're not redesigning from scratch every time we do it.

Speaker 1: 7:59

Got it. Um, so I know, I know you're considered to be one of the proven leaders, um, when it comes to innovation and manufacturing of electric motors, you've, you've accomplished, you know, I think it was close to nine years at general electric. You want to maybe talk to us about your background and how you got involved in this space.

Speaker 2: 8:18

Sure. Um, so I, I, I want to kind of go back one step and say, I grew up in an electric motor repair shop. My parents owned an electric motor repair shop growing up. So I've been working with electric motors since I was very young. It's part of my DNA. It's, it's what I do. I've been fortunate to have been supported for a long time with my husband and my now adult children, um, and been able to take advantage of everything that GE offers it's important you, so the ability to, you know, relocated to the U S and all parts of Canada and taking those different roles, um, you know, thank you for the compliment. I I've been surrounded by great teams that have helped me to get where I am today. Um, and I worked as a Western Canada sales leader for GE worked my way up through five promotions, uh, to a CEO of their business unit. And then I led the acquisition of our business to will long electric out of China and extra approached me last summer. So I've been here for just under a year now, um, and asked me to join. And I, I did a lot of due diligence. I was pretty happy with where I was in my career. I took a look at the technology and I saw that with a little bit of structure and good strategy and some good whole fashion, hard work. We could really make this disruptive for the industry.

Speaker 1: 9:35

Great. I know. Um, um, you know, you've, you've been involved since you came on board here. What about, uh, some of your other team members? I know recently you guys welcomed out, uh, I hope I'm pronouncing his last name correctly. Richard Mo. Okay. He's he, you guys brought him onboard as the chief marketing officer for the company. He,

Speaker 2: 9:56

She has a background from GE, is that correct? He does. I have a few. And in November I brought on Josh[inaudible]. Josh is my chief commercial officer, and he was the mining segment leader for Siemens Canada. When I recruited him in November. And I met Josh when I first started at GE he's a mechanical engineer, and he was working out of our Peterborough plant, and he's been instrumental to what we've been doing in our commercial space and the ability to be able to sign the deals that we've signed. Um, Josh has driven all of that strategy. Um, and then last week I made the announcement about Richard Mo. Um, this week I made the announcement about Richard memo and Richard was my director of marketing and digital strategy. Um, at GE he stood alongside me as we did the acquisition to walk along. So I'm very excited to have Richard join the executive team and to help us to take our strategies to the next level. Um, Richard's also a mechanical engineer and an aerospace engineer. And I think that, you know, that's not usual in a marketing position, but for us, the ability to be able to communicate technically is really important. So I'm, you know, Richard was the final piece of my executive team. I have John Michelson who was part of extra before I joined who's my CFO. And in may I recruited in Eric who's, who hadn't worked with me at GE. I know I brought him a lot of great people, but Eric is a lifetime career of manufacturing, power electronics, specifically inverters in the automotive space. Um, so we're, we're pretty excited to be here in Calgary and, uh, to be able to execute this together.

Speaker 1: 11:32

It's great. Cause it seems like every single person that you've mentioned brings a very strong aspect of their, uh, experience to your team,

Speaker 2: 11:40

Right? I'm a, I'm a really big believer that, uh, leadership strategy technologies, they are as good as the people that surround you. And we have a phenomenal marketing, sorry. We have a phenomenal executive team here at Xtra, but underneath them, we also have a phenomenal team of about 20 of us now that are putting out our designs and really making it happen every day.

Speaker 1: 12:05

No, it's great, uh, messaging, you know, for everybody to hear. Um, what about some of your partnerships? I know you guys have a few partnerships, there's C electric there's, uh, uh, I hope I'm pronouncing it correctly, potentia industrial from South America. Can you maybe talk to each, uh, to us about each of these and what role they play and what's expected out of that?

Speaker 2: 12:26

Yeah, it's a, it's a really, it's been a really fantastic part of joining extra and kind of going into the full clean tech segment is the partners that we partner with are people that are also passionate about making a more sustainable future for, for ourselves. So I'll start with the tenancy just because it was one of the first deals. Um, we have a PO that was placed with us last September from potential for 500,000 us potentially that is a motor manufacturer based out of Mexico. They make motor motors and generators. They do custom work for tier one companies like GE. And what they really are about is that design innovation. And then they are able to mass produce. They have a very large facility in Mexico city. They've been in business for over a hundred years. And, you know, seeing all the pollution problems in Mexico, Mexico city is the Valley. Some of the pollution comes in, it's quite severe. They decided that they really wanted to help the transmission to transition to electric vehicles. So they have developed technology, which allows a retrofit of an existing combustion engine to an electric engine. So they're actually removing the combustion engine and converting them to electric vehicles. Their powertrain is called the Pronto power, and it's the first flexible power train on the market, meaning that they can take any, you know, Chevy Ram convert it to electric. They can take any, you know, Nissan sedan and convert it to electric with their design. So they've been converting and focused on commercial and municipal fleet. So working with the city of Mexico's taxis, working with different fleet companies to transform fleet and commercial vehicles. And so we've been working with them over the past 18 months to develop in two stages, being that it was new technology, they wanted us to first to deliver a customized driver's specific to their technology. So it was a customized solution that extra developed that we delivered in June. It was a little bit delayed with COVID, but fortunately we, we put out a target to finish it by June. We delivered in June, they just released last, uh, at the beginning of this week, but they've been testing so far. The testing is going fantastic. Um, just as we expected it would. And they're going to continue testing through the end of October at the end of October, we'll deliver it to them, the same driver, an inverter, but now it will be a coil switching driver. So an actual driver that allows them to do the gearing through the drive. They have over a million miles tested road tested with different vehicles in Mexico city. So this will allow us to have our first proof of concept in a vehicle with potentia before the end of the year, whether it's a city of Mexico taxi or a delivery truck, is to be determined at the time. It will be a vehicle by the end of the year. So we're all super excited. It's a major milestone for us, definitely one of the top priorities we use that we live and breathe every day, that extra. Um, and then we recently signed a partnership with, um, I'll kind of hit three others if we have time for that. Cause I forgot about all of them, but, um, capital is, I'm actually a Vancouver based, um, agricultural company. That's developed a smart Cedar and the Cedar, you know, intelligently senses how you plant in the fields and there's a cart behind it that carries all the weight. And there's a lot of things that are really important about that, that, and I know we don't look at agriculture as the big booming business, but there's still a large percentage of the agricultural industry. That's driven through gas and other ways. And I think electrifying that Graham, the CEO of clean Zika, but I'd like to say he's going to electrify the agricultural industry. And so we're partnered with them to co-develop electric[inaudible]. Um, and what's really important for us is that that's a huge piece of equipment. We'll have some pictures and some, some news coming out about that hopefully in the coming weeks. And we'll, we'll be able to show everybody this huge piece of equipment. So you can imagine being able to do construction equipment and mining, and that would give us a really big group of concept. So that one's really exciting for us. Um, we signed with zero motorcycle, zero motorcycle was one of the first electric motorcycle manufacturers to come to market. They're now one of the top, if not the top electric motorcycle manufacturer based out of California, we signed with them about a month ago, deliver that project in January. No in March, I'm sorry. We'll deliver that project in March and they'll go through a number of months for testing as well. So we hope to see our products in zero motorcycles before the end of the year, end of 2021, the end of the year. And then the last deal is with Selectric. And, you know, we are super, super excited about it. Our partnership with the sea electric team, um, electric has developed his technology to retrofit tier one automotive to electric for commercial fleet. So they, I actually have a partnership with the likes of Ford. He know any vehicle, they purchased an empty chassis and then through their network, they retrofit that chassis with their technology, which is an electric power train and put it back. I went on the road and they have contracts in Australia with us Kia while are an Australia based company. They do have a headquarters here in North America, in Los Angeles where their CEO spends most of his time. And so we've been working with them for quite a few months. Our first project with them will be a delivery van with what's called a step up delivery van. So like what you'd see for a company like a Kia where they are delivering their product or ups or FedEx, and we'll deliver that project in the third quarter of next year. We're also working on some co-development with them around a new garbage truck that they're looking at. They already have a garbage truck in Australia, but being able to bring that garbage truck into the North American marketplace. So it's a, it's a class six 29 time, um, garbage trucks. We're excited about not only what we will deliver, but what the potential is for different products. And, uh, we continue to work with sea electric. The target right now is to deliver our proof of concept to them by the third quarter of next year.

Speaker 1: 18:45

Got it. I think earlier this year, um, you guys had a goal to announce and certain number of contracts. Am I correct? I think it was eight or nine eight deals. Well, we're halfway through and I think you've just mentioned four here. So I think you're you're you guys are definitely on track. There

Speaker 2: 19:02

We've actually closed seven of the deals. Okay. So we talked to four of them. We have a couple more with Motorino Aurora and Templar. So we we've got seven deals signed. So we have one more to go to meet our commitment. Uh, there's not any promises or guarantees, but of course we feel really confident. We have a very strong, robust pipeline and Josh and the team and myself are doing everything we can to make sure that we meet that, that final one. I need our milestone for the year.

Speaker 1: 19:29

Perfect. I wanted to ask you what's the shareholder sentiment been like, I'm sure you get plenty of emails and calls from them, but, uh, I'm sure they're quite proud of the team and what you guys have accomplished so far, but why don't you tell me about some of the feedback that you guys get?

Speaker 2: 19:44

Yeah, we've had overwhelming support. We've, you know, we've just finished a finance race. Um, a couple of weeks ago where we got overwhelming support, our shareholders have been very, very good to us. They keep engaged, we do our best to keep them informed and up to date, but, um, it's thanks to their support that we're able to do what we're doing right now. And I would say we have really, really high, if not a hundred percent level of support from our shareholders.

Speaker 1: 20:09

Yeah. It's not tough when you meet those milestones to build shareholder confidence. Um, you know, you say what you're going to do, you do it. And um, people want to join you for the success that you guys are creating.

Speaker 2: 20:21

Right? And we don't take that lightly. We have a really transparent business strategy. We meet and we talk about goals that we're putting out to the market that we're talking about. We track them under KPI gauges, and we openly discuss that. You know, we're, we're doing everything we can to meet them. But if by chance something is a mess that happens. This has business. We're not going to hit everything a hundred percent. The important thing is that we're communicating, as soon as we, it, we want the market to know it. So I think we've got a, you know, everybody knows that. And so, yeah, you're right. We've been, we've been hitting, we're having a pretty high success rate now, right now we've been hitting every milestone we've put out there. So we're really happy,

Speaker 1: 21:00

Congrats to you and your team for all of that hard work that you guys have been putting in, especially during, you know, this pandemic time where, where things get set back, um, you know, to see that you guys are, are full steam ahead is, is great. Um, I wanted to also ask you to, you know, you guys have a great technology. What's the risk, what's the reception like when you guys approach manufacturers or partners.

Speaker 2: 21:27

Yeah. So it's been good. They definitely, you know, it's, it's new, it's first to market. So they're interested, there's some proof points that they're waiting to see. We've got this great proof of concept and electric bike that we delivered to Motorino in December. But what we really need is a larger proof of concept that shows that we can scale it into the different pieces of equipment. That's why we signed the different deals that we've signed. So we've got a pretty long waiting list. That's waiting to see what we come up with in October with our next proof of concept, we found that the companies have been more than receptive, have been willing to provide us a lot, a lot of information to be able to work with us. And again, they're, they're driven by the same bigger goals. So, you know, with co with the current pandemic, it's been a little tough in the sense that priorities needed to shift. You know, they they've had teams and families to think about first and foremost, but they've also got revenue targets and financial metrics that have to take priority. We haven't seen anybody cutting R and D plans, but, and so we've been able to continue those conversations. Um, and if anything, for the stage we're at, it's given us time to really load up ourselves with a lot of data points and a really compelling value proposition for them. So again, as we, as we come into the next few months, we are pretty excited about where we are. And, um, I think customers are the customer demand is just going to be off the charts in the coming years.

Speaker 1: 22:52

Perfect. Um, where can our listeners and viewers find out more about the company? Are you guys on social media? What's your website?

Speaker 2: 23:01

Right. So we just started a couple of months ago and we started a pretty intensive marketing campaign. So our website is currently up and running, but we're also redeveloping some of the designs. So we encourage you to keep going back and checking it. And by the end of the month, you'll, you'll enjoy some new new platforms. So I would definitely encourage everybody to come visit us at www dot E X, R o.com. Um, and of course, for anybody that's in the Western Canada market or anywhere in Canada, where you can travel right now, if you're ever in the Calgary area, we welcome you to come and have a ride on our, on our test bike. It's a lot of fun and it lets you see just how smooth and dynamic our technology is and our, our centers is willing to help do. So we look forward to that. I'm going to take up on that.

Speaker 1: 23:46

All right. Anytime when I do get to come out to Calgary, which is hopefully soon enough, um, I'll make sure to come check it out. Maybe we can do another interview while we're out there, meet the team as well. So I wanna, I want to leave the floor with you. I know we've talked a lot about your partnerships, the, the overall industry, what you guys are up to your milestones. Um, why don't, why don't you talk to the viewers about what's next for the company and what they can expect in the coming months? Right. So again, I've been here for 11 months and most of my 11 months has really been positioning myself. So putting everything in place. So I just like to tell everybody, I really think, um, as we get into September, October and November, we have a lot of expectations of ourselves, both from commercial deals and technology proof of concepts that we hope to be able to share with the marketplace, um, and all of the, the background and all the process and systems in place for that now. So really now we're just running. And so just keep an eye on us as we come into that, that early fall time, I think it would really be worth it. Great, excellent message for anybody to be watching and listening. Um, please check the show notes. We will have links to not only the CSC page for extra, uh, but also extra was website, the social media links and stuff like that. So just check the show notes and everything will be there. Uh, if you like this type of content, I would highly recommend you or, uh, you know, we'd love it. If you were to hit subscribe and like our content and feel free to share it, if you find it informative SU uh, again, I loved hearing about your background, how you started off as a kid, working with motors and, and built that passion into this working not only with GE, but now with extra technologies. Um, we, I look forward to hosting you again and also coming up to Calgary and, and testing out the bike, as you mentioned anytime. Great. Thank you so much. Thank you so much. Enjoy your weekend.

Speaker 3: 25:45

Hey, it's James here reminding you that if you just enjoyed this episode of hashtag finance, there's a lot more, make sure you subscribe to this show available on Apple podcasts, Spotify, SoundCloud, Stitcher, and Google podcast shows coming up at least twice a week. So please do not miss out. Also, if you're on Instagram, please, don't forget to follow us at Canadian exchange. That's all one word Canadian exchange. We're hosting live daily content with great guests, discussing the capital markets, entrepreneurship, investing, and much more. And finally, if you like video, please subscribe to CSE space TV, that CSC space TV on YouTube. You can find more great stuff, including exclusive series content like cannabis month, 2020, and our new series investing in psychedelics as always. Thank you for listening.