Saietta Group plc (LON:SED) Executive Chairman Tony Gott caught up with DirectorsTalk to discuss the e-drive units order from AYRO, why the deal is so important, why they chose to work with Saietta, building on the recent supply agreement in India and what investors can expect over the coming months.
Q1: Tony, 3,000 bespoke e-drive units, you must be delighted that you’ve managed to secure this order from AYRO. Could you tell us more about it?
A1: We are really delighted on several levels.
To AYRO themselves, we think they’re ahead of the game in providing well thought out thorough e-mobility solutions and I think those are the sorts of clients now that are gravitating to our technology. We’ve been working with them for over a year now, and we’re truly delighted to receive this production order from them, 3,000 e-drives.
Importantly, it starts to prove the demand for our technology is truly global. We’ve reported earlier our major successes in landing contracts with Indian customers. We also have contracts in place in Europe and now, in the US so over three continents. Our technology is beginning to make real inroads into this very very important market for the future.
So, yes, truly delighted with the order, truly delighted to be working with AYRO and very delighted to be working with a US company.
Q2: Why is the AYRO deal important for Saietta?
A2: I think it’s that global demand, really. You’ve got to imagine that over a few years now, we’ve designed our e-drive systems with a lot of knowledge about the requirements of the market.
Light duty vehicles in urban communities is a market that has fantastic huge potential, and what we’re able to offer is a number of aspects which we think are relatively unique:
This means we can optimise the whole e-drive system or any particular usage around the world because we understand how the duty cycle works in the urban environment.
So, for us, this is one example about how our technical group here in Silverstone has been able to optimise the system for AYRO, in this case, and they’re working with a whole host of other clients to optimise the solutions for them also.
I think it’s important to remember for these types of companies that own fleets of vehicles, what’s important for them is the cost per mile, at the end of the day. For us to be able to introduce this technology at a relatively low cost for an Axial Flux motor, the whole system for them, means that they can amortise maybe an increase in price for the powertrain over millions and millions of miles of duty cycles.
Those companies that really understand the market, both the usage and the commercial imperatives that sit behind their business, they can see that we truly have an optimised system for them.
So, I think that’s helping people to understand what we offer; something very different, market-leading in a market that, as I say, has got this huge potential across the world.
Q3: I know you’ve been working with AYRO for a while now, how did the deal come about and why did they initially decide to work with Saietta?
A3: I think it’s the understanding. These companies that are on the button, as it were, they do a good trawl across the world’s technologies and landed upon us, over a year ago. At the time, obviously pleased to say that they saw something that could potentially help them to get their competitive advantage.
We’ve been working with them over that time, a whole host of vehicles have been on the roads now in the US, with our powertrains in them.
It’s the nature in which we work with OEM customers very very closely. The two engineering teams act as one, and the team here at Silverstone are very very used to working at a detailed engineering level with vehicle engineering companies. Most of the engineers here, including myself way back, are vehicle engineers so we understand how the powertrains fit into these vehicles and the requirements for packaging, space, optimisation of chassis and so on. So, we understand all of that and can help them.
So, they don’t need to go and try and source an electric motor from somewhere, electronics from somewhere else, transmission from someone else, they come to us and get the whole package. This is optimised for them both commercially and in the duty cycles they need, that’s what we’re about.
Q4: How does this build on your recent electric vehicle supply agreement in India?
A4: Well, it’s a perfect parallel stream of activity. As I say, we’ve got this tremendous fraction now in India, and the project I can report is working absolutely to plan, where those products will come into the first phase of production in the summer. It’ll be hitting full scale production at the end of the year, just as we’ve announced earlier.
This one as well, it’s another parallel stream. In this case, the motors will be produced from our plant in Sunderland which is also great, and they’re a fantastic process and production engineering team up there. The ones from India will come out of our joint venture in India so were producing in region, and the ones from Sunderland will also go to Europe as well.
So, it fits in with our overall business plan of optimising our assets across the world but really demonstrates that we can supply a number of OEMs now, globally. It’s the start of something quite remarkable, I think.
Just bear in mind that the scale of the market we’re talking about here. Across the world as the urban communities struggle to get environmental solutions for their ‘last mile delivery’ vehicles or waste collection etc, the solutions really is in lightweight utility vehicles that are electrically powered.
In that case, the battery technology fits the end use, our technology is perfect for the actual drivetrain and it’s a market that’s exploding in India. We’re right at the front of that and we expect that to also happen across Europe and the US.
So, we’re at a great place with great products and we’re now physically in the right places around the world to be recognised and noticed and engaged.
I can say AYRO are only one of a number of US clients that the team here behind me in the office is already working within the US, as well as the clients that we have in Europe and India.
Q5: Since we last spoke, the share price seems to have moved up nicely, it’s still got that momentum there. You must be pleased with that?
A5: Yes, we are. However, it’s very different from what it was a year ago so we fully understand that we are in a process of earning our way up in terms of share price.
The announcement a couple of weeks ago with a partner in India, AVTEC, that I think was recognised by the market as a very significant move, certainly is highly significant for us. This one also means we’re opening up a new very large market in the US, we hope that also communicates our confidence moving into the future.
You should expect over the course of the coming months, a whole series of announcements as to what’s happening both with momentum in the US and other projects etc. It’s our mission to keep the investor community very very closely involved with the evolution of this company over the next few months and years.
I think it’s going to be an exciting rise and we’re going to be very proud every time we come on screen to give people the latest information of the journey. I know there’s things coming along and hopefully they’ll come to be realised in terms of contracts, agreements and so on. The moment they do, we’ll be here to tell you all about it.
