Lora Kolondy/Wall Street Journal
To make gas-guzzling trucks, vans and shuttles more efficient, automotive startup XL Hybrids Inc. has raised a $10.5 million round of venture funding. The Boston-based company makes a hybrid electric powertrain for commercial fleet vehicles that reduces fuel consumption by 20%.
Its system–an electric motor, lithium ion battery and control software–is installed in new vehicles or it can be retrofitted into vehicles that have already been on the road. Installation doesn’t require modifications to the existing engine or transmission. The system enables regenerative braking in traditional vehicles, which helps recharge the battery.
XL Hybrids systems work with vehicles made by Ford Motor Co., General Motors and Isuzu Motors Ltd. The company plans to use some of its new funding to expand its technology so that it works in a wider range of vehicles from those and other auto makers, according to President and Chief Executive Tod Hynes.
Clients of XL Hybrids now include FedEx Corp., The Coca-Cola Co., PepsiCo Inc. and ThyssenKrupp AG. Beyond delivering packages, heavy goods and equipment, XL Hybrids has recently begun to work with fleets that transport people.
An individual investor, Peter L. O’Brien, formerly a Morgan Stanley investment banking executive and currently a board member at several public energy companies, led XL Hybrids’ Series C round. Mr. O’Brien said while he only does a few deals a year, he backed XL Hybrids because its systems are “easy to explain to fleet buyers and managers, easy to install and the economics are easy to figure out.”
Reducing fuel consumption, he said, is compelling even when gas prices are low. That is, in part, because companies are scrambling to meet state and federal mandates to control their greenhouse gas emissions.
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