Diesel Engine Giant Deutz Prepares for EVs, Acquires Torqeedo
【Summary】Torqeedo boasts a wide global network, spanning across five continents and over 50 countries. The 12-year company's expertise includes electric engines and electric mobility platforms for boats.
Deutz AG, a Germany-based diesel engine manufacturer that is responsible for the invention of the four-stroke internal-combustion engine (under N. A. Otto & Cie), is the latest company to reveal plans (called E-DEUTZ strategy) to electrify its drive systems and products.
To close the gap between its competitors, the business acquired Torqeedo, an establishment that specializes in electric and hybrid drives for the marine industry. Furthermore, Deutz will inject $120 million (acquisition costs included) into the new project.
Torqeedo Acquisition Details
Deutz's interest in Torqeedo provides hints about its EV strategy. The 12-year business boasts a wide global network, spanning across five continents and over 50 countries. Torqeedo's expertise lies in electric engines and electric mobility platforms for boats. According to Wired, the company currently has the technology to modify car drive batteries (the same units found in plug-in hybrids) for boats equipped with the Deep Blue system – winner of the National Marine Manufacturers Association's Innovation Award at the Miami International Boat Show earlier this year. This was the highlight of a recently formed collaboration between the business and Johnson Controls.
Catering to fuel-hungry marine fleets and vessels, Torqeedo's main selling point for its products is significant fuel savings, with a return of investment (ROI) between 10 to 17 years – solely on fuel costs.
"Acquiring Torqeedo will enable us to gain electrical expertise far more quickly than with a stand-alone solution and to electrify our product range where it makes sense from a technical and financial perspective," said Dr. Frank Hiller, Chairman of the Board of Management at Deutz.
"This will give us a significant advantage in a very fast-moving competitive environment. It also marks the start of our E-DEUTZ strategy, for which Torqeedo will be the catalyst."
The deal also comes with new leadership and managerial roles within the establishment. Dr. Ralf Plieninger, previously COO of Torqeedo, is now head of electrification, while Christopher Ballin (founder and CEO of Torqeedo) is the new head of strategy at Deutz.
As mentioned earlier, the Torqeedo acquisition is part of the company's EV strategy. Deutz intends to start releasing its electrified offerings starting 2020. For now, it's too early to tell exactly which markets the business plans to apply its upcoming electric engines. Currently, the company serves agricultural, commercial and industrial vehicle sectors. It is expected that Deutz will first offer electrified upgrades and variants of existing products before releasing an entire electric engine line.
Earlier this month, Deutz acquired Italy-based IML Motori (undisclosed sum), which was previously its exclusive sales partner. The takeover will allow the company to operate the establishment as a service center of its own in the Mediterranean region. Deutz will likely use its expanded service network as a distribution channel for its highly anticipated electrified products.
"This acquisition is in line with our strategy of investing in the company's service network in selected locations in order to drive further growth in this profitable segment," said Michael Wellenzohn, Deutz management board member for sales, service and marketing.
Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.
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