OnBoard Dynamics has inked a multimillion-dollar agreement with Canadian manufacturer Linamar, which will produce the mobile compressed natural gas refueling unit that OnBoard developed in Bend.
The deal represents a major milestone for OnBoard because Linamar, a $6 billion global company, will provide working capital that OnBoard needed in order to speed up product testing and set up a large-scale assembly process, CEO Rita Hansen said. The mobile unit, GoFlo, allows small fleets of vehicles running on compressed natural gas, or CNG, to refuel overnight without access to a full-fledged CNG station.
“This mobile unit’s going to change the segment,” said Mike VanDieren, vice president of corporate development at Linamar, based in Guelph, Ontario, Canada. One drawback to CNG as an alternative to gasoline is gaps in the network of fueling stations, which cost about $1 million to install, he said.
OnBoard says its mobile unit offers fleets of buses and work or delivery trucks a way to refuel conveniently and at a fraction of the cost of building a full station. VanDieren and other Linamar representatives visited Bend this week to see the GoFlo run and to meet with OnBoard’s prospective customers, which are natural-gas utility companies wanting to sell more fuel to vehicle fleets.
OnBoard has signed one contract with a utility, Southern California Natural Gas, which plans to deploy the GoFlo to school districts that have CNG buses. The next step is for Linamar to produce five more GoFlo units, which OnBoard can use to “seed the market” for future sales, Hansen said. In addition to receiving an undisclosed amount of working capital, OnBoard will have access to Linamar’s customer relationships around the world, she said.
Linamar will be the exclusive supplier for OnBoard’s GoFlo, VanDieren said, but a long-term supply contract hasn’t been worked out.
Linamar makes precision metal parts for automakers like Ford and General Motors and for commercial and industrial vehicle and equipment makers. The business is heavily dependent on traditional fuel technology, but it’s starting to move into electric vehicle components, VanDieren said.
In 2016, Linamar set up an innovation group, which is considering investment in 30 different companies with technology aimed at improving fuel-efficiency or lowering emissions, he said. OnBoard is one of five companies that have an active agreement.
“We’re not so much an R&D company,” VanDieren said. “We can help them set up. We’re a patient, strategic partner.”
McLaren Engineering Group, a Linamar subsidiary based in Detroit, will also work on getting the GoFlo into production, VanDieren said. The first unit was built in Oregon, and some components will continue to come from Oregon factories, Hansen said.
OnBoard was founded in order to commercialize self-compressing engine technology developed by Oregon State University-Cascades professor Chris Hagen. That technology is supported by $6 million in federal energy-innovation grants, but Hansen said OnBoard has struggled to attract private investors, who prefer the high rate of return and low expenses they find in the software industry.
The GoFlo has more immediate commercial opportunities than the OSU-designed engine, but financing it was still difficult, OnBoard Chief Financial Officer Steve Westberg said. Investors were concerned because OnBoard had not set up a supply chain for mass production, he said. Now that Linamar is a strategic partner, it should be easier to raise money, he said.
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