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EV chief calls for government action

Thursday, May 9, 2013

The chief of the region's biggest electric vehicles firms has called on central government to follow up its multimillion pound pledge to environmentally friendly transportation. Matt Boyle, president and CEO of Gateshead-based Sevcon, said the government's recent promise to plug £37m into the UK's electric vehicle market needs to be acted upon. The government announced the new package of funding for electric car charge points in February, amid sluggish electric car sales. Boyle said: "An investment in charging points needs to be made. Making these vehicles and being able to actually use them are two very separate matters. "[In February] the government announced this investment in charging infrastructure and this needs to be followed up. "In general, most governments elsewhere have got the message. Electric vehicles are the solution to the world's environmental woes and some are clearly more proactive than others. "Our government needs to make it easier for people to use electric vehicles, because as I've experienced myself, there are no obvious charging points anywhere."

A study last month by energy consultancy Ricardo-AEA found that the government scheme offering grants of £5,000 towards the cost of buying an eco car - as part of a drive to get 1.7 million cars on the road by 2020 - had resulted in just 3,633 cars being bought. Other reports show that only 2,300 electric cars were sold in 2012. A £37m public funding package for electric car charge points was in February which sees the government covering 75% of the cost of thousands of new electric car charge points at residential properties, on the streets, at railway stations and on the public sector estate. Funding for the scheme comes from the Government's £400m commitment to increase the uptake of ultra-low emission vehicles and is available until April 2015.

Team Valley-based Sevcon yesterday reported its half year results up to the end of March 2013. The firm generated revenues of £9.5m (US$14.6m) in the period, down from £12.2m (US$18.6m) in the same period last year. It also recorded a loss of £1m (US$1.6m) for the half year period, compared to a profit of £600,000 in the same period last year. The loss resulted in the company having to slim down its 70-strong workforce by getting rid of a number of logistics and administrative staff. But revenues for the second quarter within this period were £5.3m compared £4.3m in the first three months of its financial year.

The manufacturer of electric controllers for on and off road vehicles suffered economic woes in the Eurozone in late 2012 and early 2013, but is experiencing an upturn in global markets elsewhere. "Already 99% of what we manufacture goes abroad," said Boyle. "We've been an exporter for the best part of 40 years and we see more demand globally than we do domestically. "The Far East is a huge growth market for us, due to some of the challenges they face in protecting the environment. They see electric vehicles as a solution to their environmental problems. "We see two-wheel and city cars as being the big adapters of our technology as their batteries cost less and there is demand for these kinds of vehicles in the likes of China and Japan." Sevcon's recent improvement has been reflected in in its share price which has climbed 25 % in the last six months and is now at US$4.19 (£2.71). The firm's sluggish first six months of its current year follows three years of successive strong growth.

Results for its last full year, ending September 31, 2012, saw revenues rise by 10% to £22m, and profits rise to £740,000 compared to £442,000 in the previous year. In the last six months the company has opened a new office in Germany to target its premium motor manufacturers VW, Audi and BMW, as well as secure partnership deals in a number of additional European countries. Although listed on the NASDAQ the company was launched on the Team Valley over 50 years ago, where it employs over half of its 125 staff. Its range of motor controllers for electric and hybrid vehicles, which are designed by its skilled engineers in Gateshead, are used to vary the speed and movement of vehicles, to integrate specialized functions and to prolong the shift life of vehicles' battery. Sevcon has a particularly strong presence in the industrial and construction sectors featuring in many of the world's fork lift trucks, aerial lifts, airport ground support and mining vehicles. It continues to introduce new products and spends 14% of its annual revenue on investing in engineering.

"It's difficult to get engineers in Gateshead that are good," said Boyle. "We've got some of the best engineers from around the world. "We have factories in China, Mexico and Poland as it's more sensible to manufacture close to the market you're trading in."

Source: BQ Magazine - Link below


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