The Tesla Roadster made a big splash last year when the maker of the all-electric sports car claimed it could accelerate from 0 to 60 mph in just four seconds and hit a top speed of 135 mph.

And while the $100,000 sports car also drew rave reviews for its snazzy styling and smooth riding, for those in the know a small company called AC Propulsion played a key role in its success under-the-hood.

The Tesla Motors Inc. vehicle employed a modified version of AC Propulsion’s proprietary electric drive train, a product that has served as the bread and butter of the tiny San Dimas firm for the past several years.

But now AC Propulsion is trying to make a splash of its own.

It has developed the first commercial vehicle that not only runs entirely on electric power but is capable of giving energy back when not in use. The technology, dubbed “vehicle to grid,” could potentially save customers thousands of dollars in annual power costs.

The eBox vehicle, a modified version of Toyota Motors Corp.’s boxy Scion xB, employs a technology about a decade old and was unveiled at a car show in August. The first car rolled off the lot just a few weeks ago.

“AC Propulsion has gotten it right,” said Willett Kempton, a University of Delaware professor who developed the vehicle-to-grid concept in the late 1990s and believes the company’s adoption of the technology has made it an important player in all electric cars.

AC Propulsion’s timing may be right, too.

After years in which much of the alternative vehicle focus was on hybrid electric-internal combustion vehicles, all-electric cars recently got a boost when General Motors Corp. signaled its intention to re-enter the field with the Chevrolet Volt, a concept vehicle the company said can travel 600 miles on a single charge.

But with a small staff of 18 employees, AC Propulsion can only make about one or two conversions each month and has only seen one customer actor and electric vehicle enthusiast Tom Hanks drive away with one so far.

Sherry Boschert, president of the San Francisco Electric Vehicle Association, said the limited influence and restricted production capacity of small electric vehicle makers stalls the growth of this type of vehicle.

“A handful of demonstrations isn’t enough,” she said.

Another major hurdle for the company, and for most electric car makers, is the cost. Customers seeking an eBox must provide their own Scion xB, which runs about $15,000, and then pay another $55,000 on top of that for the conversion.

“The cost is obviously a big issue,” said AC Propulsion President Tom Gage. “But there still seems to be significant interest.”

Consultants meet

AC Propulsion was founded in 1992 by Alan Cocconi, an electrical engineer who served as a consultant for GM. He worked on several projects for the automaker, including a solar race car and the vehicle that would become the EV1, a limited production electric car GM rolled out in 1997.

Cocconi struck out on his own and started AC Propulsion in 1992 with his own money. At first, the company primarily provided contract research and development for electric vehicle makers. Meanwhile, Gage was working as a consultant for Chrysler. He had worked with alternative fuel projects during his eight years with the company and in the mid-1990s he interviewed Cocconi in the course of his consulting duties. The two struck up a relationship and in 1995 Gage joined AC Propulsion.

(Cocconi still retains an ownership interest in the company and serves as an advisor, but does not play an active role in daily management.) The company went on to develop what is now its core technology, the AC150 EV Power System, which features an electric motor, inverter, charger, power supply and cooling system.

It retails for a cool $25,000, and about 100 of the drive trains have been sold, both to small companies looking to build electric cars and to large automakers. The company also licenses out its drive systems and builds prototype electric vehicles, charging several hundred thousand dollars each, for clients such as Volkswagen.

Revenues have been hovering between $1 million and $2 million annually for the past several years. A little over a year ago, more than half of the company was sold to a group of investors, allowing engineers to spend the bulk of 2006 developing and building the eBox.

One of the most attractive possibilities of vehicle-to-grid technology, backers say, is the potential for electric vehicle owners to mitigate some of the cost by selling energy back to the power companies.

“It very easily pays for all the electricity used to drive and you probably have a lot left,” Kempton said.

In order to earn money, the concept hinges on the varying costs of different energy markets. Power companies can cheaply provide the bulk of the energy they provide. But utilities need additional energy during peak energy-use hours of the day and unforeseen power surges, and producing this with large generators is costly and inefficient.

In theory, electric vehicle owners could buy cheap energy during off-peak hours, store it in their car batteries and sell a portion of it back to power companies during peak hours. This process loses about 20 percent of the energy during the round-trip, but AC Propulsion estimates that the average driver could still earn about $300-$500 per month through this process.

Edward Kjaer, director of electric transportation for Southern California Edison Co., said the idea holds potential, but it could be a decade before the concept becomes a viable reality. “Trying to feed energy back into the wires is just not a practical situation today,” he said. “We’ve got to be very careful not to overpromise and underdeliver, but this does hold significant promise.”

In order for power companies to be willing to contract their ancillary services to electric vehicle owners there must be thousands of vehicle-to-grid capable cars out on the streets. Kjaer said Southern California Edison and other utilities are working in some capacity to make vehicle-to-grid a reality, but he is cautious not to be overly optimistic.

At a recent emissions-reduction symposium put on by the California Air Resources Board, representatives of Pacific Gas & Electric Co. and San Francisco’s Bay Area Rapid Transit District each made presentations about vehicle-to-grid technology.

Eugene Nishinaga, BART’s manager of research and development, said that if vehicle-to-grid capable cars could charge in BART stations and provide energy to the trains, the agency could save more than $260,000 per year.

In the meantime, Gage said his company will continue to cruise along. And as more companies accept the possibility that vehicle to grid technology is viable, Gage said he is hopeful for the future of electric cars.

“That acceptance, I think, is a very significant advance for electric vehicles,” he said.

AC Propulsion Inc.

Core Business:

Electric vehicle drive systems


Employees in 2006:

12


Employees in 2007:

18


Goal:

To become a leading producer of vehicle-to-grid electric cars


Driving Force:

Increasing desire for alternative cars