22 December 2016
Australia's Clean Energy Innovation Fund is to invest in a Geelong-based company that has developed world-leading technology to tackle one of the most difficult to address sources of carbon emissions - light vehicles.
Carbon Revolution produces the world's only mass produced one-piece carbon fibre car wheel. The unique carbon fibre wheels are as much as 45 per cent lighter than aluminium wheels, reducing vehicle weight and therefore fuel consumption and carbon emissions.
Drawing on finance from the Clean Energy Finance Corporation (CEFC), the Innovation Fund will commit $10 million to Carbon Revolution's $50 million capital raising. The capital raising will support the company as its expands its output from under 6,000 wheels a year to more than 100,000 annually by 2021.
This growth will see a threefold increase in Carbon Revolution's highly-skilled employee base, providing a significant boost to Geelong's high-tech advanced vehicle manufacturing capabilities. Carbon Revolution has a state-of-the-art factory purpose-built to manufacture carbon fibre wheels, located in the Advanced Manufacturing Precinct at the Deakin University campus in Geelong.
Clean Energy Innovation Fund transaction lead Blair Pritchard said: "Through this investment the Innovation Fund is working to accelerate the commercialisation of a technology that is a global standard setter. We hope this technology can be as transformative as other Australian innovations, such as wi-fi technology and the Cochlear ear implant."
Carbon Revolution Chairman James Douglas said: "We are delighted with the support that we have received from existing as well as new shareholders, particularly the Clean Energy Innovation Fund. It demonstrates the increasing support for innovation and advanced manufacturing in Australia."
Carbon Revolution CEO Jake Dingle added: "Carbon Revolution is now well positioned to deliver on our plan to grow production in line with the growing demand for our technology from around the world. We now have the means to drive our product and process technologies to the next level of performance, efficiency and scale, as our wheels are fitted to much higher volume vehicle platforms. It will also allow us to appropriately resource our entry into the market for aircraft wheels. This is a very exciting phase for the company and one that will see us cement our global leadership position."
Light vehicles account for an estimated 10 per cent of Australia's total emissions, according to the Climate Change Authority. Carbon Revolution's carbon fibre wheels offer an alternative to heavier aluminium wheels, which are used in about 50 per cent of cars globally. The carbon fibre wheels are up to 13 times stronger than aluminium wheels and can deliver a six per cent improvement in fuel efficiency when they are fully integrated into vehicle design.
Carbon Revolution's Geelong-manufactured carbon fibre wheels are already being used in growing volumes in high performance vehicles manufactured by Ford in the US. Carbon Revolution is looking to capitalise on manufacturer interest to extend this reach to more affordable models. The global automotive market produces an estimated 420 million wheels a year, with an annual growth rate of some four percent.
Mr Pritchard said Carbon Revolution was an important example of the way innovative businesses can contribute to practical clean energy solutions, while at the same time jump starting an advanced manufacturing hub such as that in Geelong.
"These wheels will reduce carbon emissions because they require a less energy intensive production process than the aluminium smelting required to produce alloy wheels. They will also have clear longer term benefits because of the ongoing fuel savings achieved in vehicles fitted with these wheels," Mr Pritchard said.
"While carbon fibre wheels will be at the high performance end of the market in the near term, vehicle enhancement technologies typically trickle down to the mass market. By supporting the expansion of Carbon Revolution's Geelong plant we are contributing to economies of scale, which will make these wheels more accessible across a wider number of vehicles."
CEFC CEO Oliver Yates added: "Vehicle emissions are a major issue in all economies. Through the Innovation Fund, the CEFC is pleased to provide finance to support such an innovative Australian company in tackling this problem. Manufacturing globally is highly competitive and Australia can compete in the manufacturing of new technologies when we combine capital and innovation."
The Clean Energy Innovation Fund supports the growth of innovative clean energy technologies and businesses, drawing on finance and skills from the CEFC and the Australian Renewable Energy Agency (ARENA).
ARENA Acting CEO Nicola Morris said: "This is another example of the fruitful collaboration between the CEFC and ARENA on the Innovation Fund. Expert advice on the project was provided by ARENA Advisory Panel member Lyndon Frearson, with Mr Frearson's past experience at Ford proving crucial to the success of the transaction."
Carbon Revolution is a Geelong-based advanced manufacturing technology company that has developed and commercialised the world's first mass produced carbon fibre car wheel. It produces carbon fibre wheels for the Ford Mustang and Ford GT and has agreements with a number of other major global car makers for new cars which will enter production in the coming years. The company also sells its products into the automotive aftermarket. Carbon Fibre wheels deliver significant efficiency benefits for all cars which translates into substantial emissions reductions and performance improvements. Carbon Revolution plans to IPO in around 2 years.
Media release, 2016