Exro Technologies Inc. (EXRO-T) will focus on deliverables, innovation and new programs in 2024 as pressure from a slowdown in the electric vehicle (EV) market leaves its mark on the Calgary-based power control company.

In an interview with Sustainable Biz Canada, Exro CEO Sue Ozdemir said her company, which develops components for electric motors and batteries, is in the middle of a disruptive transition that will experience peaks and valleys.

The industry saw both in 2023, including a decline in interest in buying EVs, according to data from AutoTrader.ca. Large automakers GM, Ford and Tesla also announced expectations for a slowdown in EV sales in 2024.

“We believe that the transition is definitely occurring, just at slower speed than everyone anticipated,” she said.

Ozdemir projected confidence in her company, pointing to expectations to deliver over $200 million in revenue this year, continuations of partnerships and technology developments as she called for patience amid the EV industry’s struggles.

Exro’s current projects

Key to Exro in 2024 are developments for its two main offerings: Coil Driver, an EV traction inverter; and Cell Driver, a battery energy storage system.

The Coil Driver Heavy Rare Earth/Rare Earth-free motor design, which aims to reduce the amount of rare earth minerals in EV motors, will be installed in its first passenger vehicle prototype.

Ozdemir said implementing the Coil Driver in passenger vehicles has been Exro’s goal for many years. One release says it has “holy grail potential” to put Coil Drivers in millions of passenger vehicles.

The pilot with a global automotive original equipment manufacturer (OEM) started in 2023 and will take all of 2024 to complete, Ozdemir said.

Low volume manufacturing for the Coil Driver began in September 2023, she said, setting the stage for future “smooth and efficient operations.” The company expects to deliver more volume throughout 2024, and ramp up production in the beginning of 2025.

Initial purchase orders for Coil Driver came from companies such as Vicinity Motor Corp., HB4 and Giaffone, a release states.

With its partner Linamar Corp., a Guelph, Ont.-based manufacturing company, Exro plans the launch of the E-Beam Axle program. The relationship will see Exro’s Coil Driver integrated into Linamar’s eAxle, providing an opportunity to reduce maintenance requirements, energy consumption, costs and complexity, according to Exro.

The E-Beam Axle program is on track to be demonstrated at the Advanced Clean Transportation Expo in Las Vegas in May for Class 5 and 6 commercial vehicles, and have orders secured later in 2024, according to Exro.

The certification of Cell Driver by global safety science company UL was delayed after advancing to the final stage in August 2023. The energy storage offering needs the UL certification to deliver its first units, Ozdemir said. She expects the certification to be complete in the coming weeks.

Exro says prospective orders for Cell Driver have not been impacted.

The revenue target for Exro in 2024 is to cross the $200 million mark through deals with major blue-chip OEMs, Ozdemir disclosed.

Withstanding a paradigm shift

The EV industry has hit bumps in the road as of late, affected by supply chain disruptions and slowing demand. Ozdemir indicated Exro is not immune to these impacts. A shareholder letter written by Ozdemir mentions “frustrations with how this macro environment has contributed to the performance of Exro's shares.”

“What we see more than cancellations is delays in programs,” she said about the EV industry.

The transition to EVs is hard from a technological standpoint, Ozdemir continued, especially for legacy firms and new companies. The EV transition is not just replacing the gas-powered engine with an electric engine, but changing “everything that consumes electricity in your vehicle.”

Exro aimed to steady itself by acquiring SEA Electric because it “is a good way for us to take control, provide stability in an unstable transition, and be able to take advantage of contracts that are already placed on their side,” she said about the Torrance, Calif.-based electric drivetrain system provider.

After announcing plans for the acquisition of SEA Electric on Jan. 30, Exro’s stock fell from $1.01 per share to $0.86 per share as of Feb. 13. Ozdemir explained the drop as a result of the volatility of the EV sector and Exro, along with SEA Electric, announcing a concurrent capital raise of $42 million.

A problem Exro must overcome is the need for clearer communication, she said. “It’s a hard deal for people to understand because they initially think we’re a truck company now, which we are not, we are a technology company.”

Despite the unwanted detour, Ozdemir said she still sees the EV transition occurring. A “paradigm shift” like this will cause disruption that is part of the cycle, she added.