• What makes the Rotapower family of engines the best engines ever made for the hybrid engine market or even any other market? Which independent expert corroborates this?
Small size and weight without any vibration particularly in a two-rotor form. We received a $500,000 contract from the Defense Advanced Research Project Agency (DARPA) to develop a hybrid car using our rotary engine. We received this contract after DARPA determined that a rotary engine is ideal for the hybrid car. It occupied 20% the space of a conventional engine and the 50 HP engine was completely enclosed in a one cubic foot soundproof box.
• What are the main advantages and attributes of your engine over existing engines?
• 40% less fuel consumption than 4 stroke piston engines
• Much lower vibration
• Much quieter
• Far fewer emissions: 95% less Co & HC; 50% less Nox; 40% less CO2
• 20 to 30% less expensive to manufacture than 4 stroke engines
• 70% smaller size and weight than a 4 stroke piston engine
• Only 3 major moving parts therefore much more reliable.
• Given that there has been negligible peer criticism over the years and huge encouragement from so many sources for your engine, it just seems incredible that such a phenomenal product has struggled to find investors. Why do you think that is?
Emerging engines almost always take their lead from the automotive industry even if there is a large potential market elsewhere. The automotive companies dropped the rotary in the mid-1970’s due to the need to address fuel economy and emissions on their existing engines (critical period). This gave the impression that the rotary had serious problems. This view was compounded by the seal problem the Mazda initially had. It’s ironic that if the rotary had never been introduced until we did so I would have all the money I could use. Only now with the hybrid car does the rotary engine have a chance. It is obviously the outstanding candidate for this application and that is what is required to assure its success. I might add that engine development is normally very expensive. We can compete only because of the huge database we were able to acquire. Add all this to the recent breakthrough we achieved with our compounding configuration now virtually guarantees the success of the engine.
• Who is your nearest competitor and in what ways is your engine superior to theirs?
There is no competitor for our Rotapower engine. Should someone else may attempt to build, our advantages would be in three areas:
a. Over $250 million has been expended on the charge cooled rotor design of the engines we acquired the rights to. We also expended $35 to $50 million. The catch-up cost of a competitor gives us an enormous advantage.
b. Our parallel path rotor-cooling patent eliminates side loading on the rotor and distortion of the rotor bearing. These are the denominate areas of wear in prior charge cooled rotor engines.
c. Our patent applied for on the compound engine.
• You have received orders from Malcolm Bricklin of Visionary Vehicles (VV) for 250,000 engines. What exactly do you have to do in order to for the orders to be irrevocable?
Malcolm Bricklin of Visionary Vehicles like any of our other letters of intent or conditional order supplier will need a few engines modified for him and tested in his application. He would probably pay for the engines, modification and testing but we would need to supply him engines produced with as close as possible to production tooling. That is where the additional expense comes in. For example we sand-cast our rotors in the 530cc engine, which is adequate for testing during development but in production we would use the lost foam casting tooling which we have for our 650cc engine. There are many other items that need this step up before one can comfortably provide beta engines even when the engine is well proven in prototype tests.
Therefore the simple short answer is that letters of intent can become firm orders when the LOI holder is either comfortable with his own tests of beta engines (larger user) or has seen independent tests that gave him a comfort level (smaller user). To achieve this we need further funding.
• To what extent has VV conducted a technical review of the engine?
VV is primarily relying on it’s previous confirmation of our data on fuel consumption and emissions. As far as the other attributes of rotary engines their reliability, vibration levels, etc. are common knowledge. Moreover the OMC engine that provided the basis for the engine VV would use is already proven to be reliable and low cost.
• How much money do you need in order to meet the requirements of the order?
That depends on whether we become the production source or whether we bring the engine through a pilot production run prior to turning it over to a joint venture partner to produce.
a. If we do everything it could require $50 to $60 million for one model to quickly reach 100,000 units per year production level. However a lower volume start-up level similar to that shown in our business plan might require $25 million and allow the volume production of the two most marketable models.
b. If we joint venture the development (i.e., JV does volume production) Freedom could provide at least two production ready and proven engines for $10 to $12 million. This would include endurance testing of the engine after completion of the engine with production tooling and also contracting a series of independent tests with recognized labs.
Still if you think about it, 100,000 engines per year is about $200 million in sales of a hybrid type engine.
• At what point will you be able to borrow against the order?
One would expect to borrow against irrevocable letters of credit. This could be obtained in many cases after beta tests generated from our present tooling have met the conditional requirements.
• Exactly how will you spend that money and over what timescale?
Again that depends on whether we are the production company or we are the license/J.V. As the JV, which is my preference, we would complete two market ready engines with tests in less than one year. The funds would primarily be used for tooling and testing. Although we would need more like $20 to $30 million to cover debt reduction and provide a contingency.
• What is the value of the VV order?
Our engine sold as a hybrid power plant could expect to command a price in the area of $2000 each for a 60-65 hp model. VV’s order would then total $500 million but Mr. Bricklin is very unlikely to hit that level of production within the first year or two despite his level of optimism. However the engine VV is interested in is likely to be very popular for other hybrid cars and other applications.
• Which companies have rejected the engine following a technical review?
None, but at the same time we have generally chosen to have potential users visit us and witness the engines operating in various applications here. If we are to go after the OEM market we will need a number of field representatives to work with the OEMs during their test programs. We have never had the financial strength to adequately accomplish this. The bottom line is that we are a technically very rich company with very little marketing capability. The huge number of letters of intent to acquire engines shows the interest that we need to address with a lot of applications engineering.
• Who is your nearest competitor and why?
If our 150cc and 450cc were available and were proven in their reliability they would have no competition in any application where weight, size, vibration and emission are important in combination. I do not believe you would find any argument to the contrary. However while historically the rotary has been reliable in the Mazda, OMC and Ingersoll-Rand, a larger OEM is going to want to see the engine running in his equipment before committing and any OEM is going to want independent tests of emissions, fuel consumption, etc.
•• A number of well-known people support your engine. Who are they?
You saw the comments of General Electric and those of Dr. Andy Burke, a world leader in hybrid cars. Certainly Malcolm Bricklin is a pretty famous name and is a big supporter.