Aussie EV maker needs more money

Australian fuel-cell electric vehicle start-up H2X says it has the funding to build the commercial vehicles it plans to launch with, but will then have to seek more backing in mid-2021 to continue with its ambitious product rollout.

Revealed publicly last Friday, H2X wants to reboot the Australian car manufacturing industry by exploiting massive local hydrogen resources.

It intends to start production in Port Kembla, NSW, in July next year of two heavy vehicles – expected to be a prime mover and a bus – and then follow with light commercial vehicles and eventually passenger vehicles when the refuelling infrastructure has expanded enough to make that feasible.

H2X has launched with investment from Australian companies Elvin Group and Denzo PL, the latter led by motor racing veteran Ken Mathews.

It has no federal or state government funding, nor received any grants through renewable initiatives.

“We have got a secure [financial] position to go forward with a sustainable business with those [commercial vehicles] at the moment,” H2X CEO Brendan Norman told carsales.

“Regarding the passenger vehicle we are looking for additional funding on that and so far that has gone very well. We have had a couple of very good discussions which I would say are very close to being closed.

“But the most important thing is we can start a sustainable business. I would say we are looking at getting up to the 5000 vehicle per year volume with the products we have already secured.

“But we are looking at a business that will take us into the 20,000, 30,000, 40,000, 50,000 and more mark over coming 10 years or so. To get to that point we will be looking for a bit more funding.

“We will have a funding round to get into that higher volume segment in the middle of next year.

“We are very confident we can receive the sort of money we require. We are not looking for the super amounts of money the traditional car companies would need simply because we have a more simple vehicle structure.”

Norman said the funding round would not be an initial public offering: “We may look at it in the medium term … we are looking to establish ourselves as a reputable deliverer of vehicles before we think about that.”

Critical to H2X’s success will be economies of scale. Norman says production 10,000 units will deliver competitiveness with traditional ICE rivals. The company is aiming for 20,000 annual production by 2024. About two-thirds of that volume would be for export.

Norman said H2X would not need EV subsidies to survive in Australia.

“It’s not that way we built the business,” he said. “We’ve built the business on the basis that we know we have to make them competitive.”

Norman is an auto industry veteran who began his career with BMW in Melbourne and then moved internationally before joining Volkswagen Group and then Infiniti.

More recently he’s veered into renewables, working with the Welsh hydrogen car company Riversimple, the Chinese start-up Grove Hydrogen Automotive and the Malaysian arm of the hydrogen truck and bus maker Hyzon Motors.

Hyzon has recently been established in Australia and it seems logical this is H2X’s heavy vehicle partner.

Norman’s also been involved in renewable companies that worked in areas such as green factory development and power generation projects.

One of the companies Norman established was Pateo Kinetic, which has now been rebranded as H2X. While it has only been in existence for a couple of months, he says its origins extends back to 2016. That was when he was at Riversimple, where his H2X partner Chris Reitz also worked.