Carbon revolution

[Bossxr8]

Just wanted to post this article up, cause I don't think these guys get the recognition they deserve. They are the only ones who have been able to mass produce carbon fibre wheels, and many bigger companies have tried and failed to do what they have succeeded in doing.


https://www.goauto.com.au/news/gener...-14/81307.html


Australian hi-tech wheel manufacturer sets sights on becoming major global supplier





General News logo14 Jan 2020


By TERRY MARTIN



AUSTRALIAN wheel manufacturer Carbon Revolution has set its sights on becoming a major supplier to the world’s vehicle manufacturers, with growth on a massive scale occurring at its Geelong production facilities to meet demand for its unique lightweight single-piece carbon-fibre wheels.



After publicly listing on November 29 and raising $30 million (along with a $60 million selldown by existing investors) with a market capitalisation of $331 million, Carbon Revolution now has the backing to forge ahead with the industrialisation and capital investment required to deliver on its near-term commitments under contracts it has in place with global automotive OEMs, among them Ford, Ferrari and Renault.



The company has delivered 18,000 or so units in total from 2015, when it broke through the thick wall of OEM resistance with a supply contract for the Ford Shelby Mustang GT350R, through to last year’s IPO, but momentum is building. Quickly.



From 5700 units last financial year to a forecast annualised run rate of 32,000 by June 2020 based on existing contracts, by which time the company will be profitable for the first time, Carbon Revolution is yet to commence production for three other signed contracts with global OEMs including a freshly minted supply deal for an SUV.



No one inside or outside the company will confirm, but the latter is believed to be with Jaguar Land Rover, forged off the back of a successful campaign with Don Law Racing’s F-Type R at the 2015 Pikes Peak International Hill Climb and through strong ties with JLR Special Vehicle Operations’ engineering director Jamal Hameedi, who adopted the wheels for the GT350R in his previous role as Ford’s global performance vehicle chief engineer.



To get there, the Geelong facility’s footprint recently increased from 3000 to 10,000 square metres, the workforce has passed the 400 mark and the factory floor is fast becoming much busier with more automated production lines that Carbon Revolution chief executive Jake Dingle likens to a world-leading engine plant in terms of sophistication – though one where the Aussie firm has invented its own process steps and worked with other local companies to build bespoke machinery.



The bigger picture is one of more than 1000 employees in Geelong – even as efficiency improves through greater automation – and deeper supply into North America, Europe and Asia that could ultimately lead to additional production facilities in these markets.



“We haven’t got a 10,000-square-metre factory just to do 32,000 units per year,” Mr Dingle told GoAuto in an exclusive interview. “You look at the size of the global wheel market – it’s massive.



“We’re only really scratching the surface at the moment with premium and high-performance programs, we’ve signed our first SUV program, we’re on the performance hatch market as well as the sportscar market, so the opportunity is extremely large.



“Everything we do is for export – we’re not servicing the local market given that there is no longer any vehicle production locally.



“We’re not going to get to 430 million wheels a year, which is the total new-vehicle market, but the studies we’ve done indicate a decent-sized chunk of that as being addressable – way more than we’ll have capacity to service in the next handful of years.”



The company currently services the high-performance and luxury new-vehicle wheel market (estimated at 36-56 million wheels per annum) and beyond the short to medium term expects its products to be adopted across more mainstream segments.



As GoAuto reported in 2015, the annual capacity of the upgraded Geelong plant was initially expected to be at least 250,000 units, but during the redevelopment the company has beefed up its industrialisation program under former Tesla Motors manager of manufacturing engineering Luke Preston (see separate story) and is clearly shooting for much higher volume.



Mr Dingle said the company is focusing on new vehicle supply, rather than aftermarket, confident in the quality of their wheels and market appeal after successful partnerships – typically involving investment in each program from the OEM involved – with Ford (Mustang, GT), Ferrari (488, SF90) and Renault (Megane RS Trophy-R) that has opened the doors to other models within these brands and with alliance partners and rival manufacturers alike.



“You can already see from what’s in the public domain that there’s a cadence now of programs that are coming through within each OEM and there’s a cadence of new OEMs being added,” he said.



“And there’s a limited number of OEMs around the world, so from a management and an overhead point of view we’re focusing on establishing the ideal business model to be a leading Tier 1 global supplier into the automotive industry for a hi-tech product and technology like this.”



Among the obvious threats are competitive pressures and intellectual property rights, but a decade of hard graft has seen Carbon Revolution develop the science around the raw materials involved and invent complex tools and processes to create a sophisticated product that adds value to a vehicle in areas such as performance, efficiency and refinement.



This has been achieved with support from Deakin University (where it is based) as well as over $150 million of funding raised mainly from private sources but with some strong government support to supplement.



More than 40 patents, and others pending, also provide a useful buffer zone.



“The threat of somebody just coming out with a ready-baked version of this technology, we don’t see that,” Mr Dingle said.



“We have a pretty clear understanding of what’s going on in the market. We tend to behave as if we’ve always got someone on our shoulder, though, you have to – and you have to keep moving really fast.



“And, look, there is a big market there. There is room for more than one player. Our aim is to have unequivocally the best product and to have the most industrialised, efficient processes for making the product that are not only efficient from a cost point of view but very efficient from a quality and control point of view to meet the needs of the automotive industry and ultimately the aerospace industry as well.



“There’s a benefit in running very fast but having a really clear perspective on what you need to achieve. Our customers are some of the most sophisticated companies in the world, the automotive supply chain is probably the most sophisticated supply chain in the world, and there is a high threshold to get in and to then stay in that. That alone is a very important barrier.”



Carbon Revolution’s chief technology officer, Brett Gass, added that the company was in a unique situation as the only carbon-fibre wheel supplier to have reach this point with major OEMs, pointing out that other car-makers have not had the same success with their own projects and partners.



“Big multibillion-dollar companies have had a go at this and launched a product and essentially pulled it back and failed,” he said.



“We are a global leader in that technology space and we’ve been there for a long time. Right now, there’s people trying but they haven’t got it done – go and see how many car manufacturers offer a single-piece carbon-fibre wheel.”



There is a limit to how much volume is ultimately produced out of Geelong, not only as automotive contracts grow but as the company diversifies into new automotive segments and adjacent markets such as aircraft/aerospace.



Earlier last year, for example, Carbon Revolution received a $2.4 million federal grant to design the world’s first carbon-fibre aircraft wheels, aimed initially at the Boeing CH-47F Chinook helicopter.



“We’re obviously being strategic and looking at how we best exploit the technology that we’ve developed,” Mr Dingle said.



“The range of possible applications all rely on variants of the same technology that we’ve developed, whether it’s EVs, hydrogen vehicles, whether it’s buses, transit vehicles. This is arguably the most sophisticated carbon-fibre composite component that’s being manufactured anywhere in the world, and we’re mass-producing it, so all the knowhow and technology and the tools that we’ve developed to do that are directly applicable for these other things.



“There are fantastic synergies and great opportunities to exploit it into other markets, it’s just there’s a certain amount of bandwidth and there’s a great set of economics coming out of expanding what we’re currently doing. You never get thanked for being distracted, either.”



The Carbon Rev chief sees the company’s one-piece carbon-fibre wheels as “classic example of a trickle-down technology” like fuel injection, disc brakes, air-conditioning and the automatic transmission, opening up the market in a similar way that alloys achieved over steel in the mid-1970s but with today’s car-makers operating in a vastly different environment.



“We obviously dramatically reduce the weight versus an aluminium wheel in a world where energy and range extension are probably far more important than they were back in the early days of aluminium wheels,” he said.



“The opportunity here is to continue to provide the very best, the very lightest, the highest performing wheels to the market that wants that, but then to use what we’ve learned to develop somewhat less sophisticated wheels still using carbon-fibre and all the technology we have developed, and being able to get to larger programs at a different cost.



“This product won’t sit in that ‘commodity’ zone but it will add significant value and it will stand on the value that it can add to future platforms like EVs and eventually freight and logistics fleets.”



As such, overseas expansion is expected at some point, but Mr Dingle said he was committed to keeping both R&D and a baseload of manufacturing activities at its Victorian headquarters.



“Maintaining R&D and the development of the technology here, but then expanding offshore beyond the maximum capacity of the Geelong plant to achieve scale and economics as things grow, is what we have in our future – but there’s still a lot of growth to get out of Geelong. We expect this plant to expand quite considerably,” he said.



“What we are doing here is extensive automation, which means we are not chasing low labour costs at the expense of being located near our customers.



“Automotive customers want a short supply chain for large-volume programs, so what we’ve done is focused on reducing costs through automation and the use of raw material, and how we use it, and that means that, yes, we can ultimately set up facilities in the markets that are producing high-volume programs – so you can think of the North American markets, European and into Asia.”



This all sounds a little incongruous in a meeting room in Waurn Ponds, a 20-minute drive from Ford Australia’s original factory site on the Princes Highway at Norlane, in Geelong’s northern suburbs.



But Deakin Uni’s version of Silicon Valley has a different outlook.



Asked to describe how he felt about the successful IPO, and where Carbon Revolution was now heading, Mr Dingle said: “It took a while for people to believe that you could do this from here. So the fact that we’ve had such a great response, and obviously the response since listing has been strong as well if you look at what’s happened to the market.



“We’re not watching the share price every five minutes; operationally, nothing’s changed: we’ve got a plan, we’re delivering on the plan and we’ve got a team of over 400 people who are now very, very focused on getting that done and very passionate about it, so none of that’s changed.



“Getting the listing done indicates that the country is now embracing what we’re doing, which is great.



“We’ve always been passionate about this being a great Australian company and look to the achievements of CSL and Cochlear as great benchmarks for what can be achieved. This is far more relevant than comparing us to the local automotive industry that has now closed.



“It’s better to compare us to other Australian advanced manufacturing physical technology companies that have created a global leadership position.”

[Magee]

This is also good for the Aussie companies that supply the components and tooling.

I hope they do take off as it would be great for whats left our our very small Automotive Manufacturing Industry.

[Sprintey]

Yep a real good news story!

[Bossxr8]

The potential is sky high. The more they scale up and reduce the manufacturing time, the cheaper they cost per wheel. Which opens the market for them right up to most performance vehicles bar the cheapies.

I know they have considerably reduced manufacturing time and cost over the last few years.

[DASTIG]

Tried to get shares in this float but it was basically impossible to get any. Shares have done very well since float. Been waiting for them to fall back a little after the initial float hype but has not occurred.

Great Australian company!!

[XR Martin]

Government really needs to get on this before they are tempted to go off shore.

Imagine if they could achieve just 10% of the worldwide performance market?

[Bossxr8]

Originally Posted by DASTIG

Tried to get shares in this float but it was basically impossible to get any. Shares have done very well since float. Been waiting for them to fall back a little after the initial float hype but has not occurred.

Great Australian company!!

I have thought about purchasing some of their shares. Can only go up from here. They own the market atm.

[123Cat]

Must be tough to manufacture here with the high wages and energy costs

It has to be a niche market , or it might not work

[Bossxr8]

Originally Posted by 123Cat

Must be tough to manufacture here with the high wages and energy costs

It has to be a niche market , or it might not work

They have been able to make the process highly automated, which helps.

[Magee]

Originally Posted by Bossxr8

I have thought about purchasing some of their shares. Can only go up from here. They own the market atm.

I share the same thought and I was able to buy some 1 week after the float. Not expecting any fast gains and it is more to give to my kids when they are older.

I am pretty sure that CBA is listed as one of the major share holders so to me it is pretty safe investment, but don't take my advice, just do your own research and then make your decision.

[Halba12]

Originally Posted by Bossxr8

I have thought about purchasing some of their shares. Can only go up from here. They own the market atm.

Hi there. The market they 'own' is small. currently they have the following OEM deals


1. Ford GT 2016 & GT350 - these are their main volumes, legacy contracts. say around 3000-4000 wheels as stated. These are also winding down as old models

2. Ferrari- 2 OEM-s the volumes of these are 500 cars or 2000 wheels per annum - these are option only.
3. Renault Megane - This car is only 100 cars produced per annum. Option only, so around 30-40 cars or 200 wheels.
4. GT500 - option only. 500 cars, and maybe ~100 cars or 500 wheels.
5. Unnamed SUV - no volumes stated, unknown, say 500 cars or 2000 wheels per annum.


Total contracts ~7000 wheels drastically short of the hyped up expansion to 32,000 wheels. Half of this number is on production winding down, so say 5,000 wheels. This is because the OEM models production levels are tiny and they come with options and not all will take up the options as its not compulsory.


In conclusion i'd be very careful with this company's claims of revenue. Production is many times higher than actual sales. And what about profit? It makes losses- hasnt turned a dime since listing. Burning approx $25-30m per year. Market cap is nearly $600m at current prices, it has surged 60% from IPO of $2.60, which is very expensive.


And in terms of costs per wheel. I dont see any adoption happening anywhere at the price levels of $15K retail for carbon track package. Thats too high. Average performance cars are only $60-70k like the Ford GT500. The likes of Porsche make their own in house, as do a few others.

[Halba12]

Originally Posted by Magee

I share the same thought and I was able to buy some 1 week after the float. Not expecting any fast gains and it is more to give to my kids when they are older.

I am pretty sure that CBA is listed as one of the major share holders so to me it is pretty safe investment, but don't take my advice, just do your own research and then make your decision.

Just cos CBA - through their investment arms take a stake doesnt guarantee safety. CBA is investing clients funds not their own money through mainly Colonial their investment arm. CBA does not hold shares directly. The company has been burning cash since inception and does not make any profit. The ASX stockmarket is in a bubble phase now, so brokers eager to promote new investment ideas are promoting it daily.

[XR Martin]

Originally Posted by Halba12

Hi there. The market they 'own' is small. currently they have the following OEM deals


1. Ford GT 2016 & GT350 - these are their main volumes, legacy contracts. say around 3000-4000 wheels as stated. These are also winding down as old models

2. Ferrari- 2 OEM-s the volumes of these are 500 cars or 2000 wheels per annum - these are option only.
3. Renault Megane - This car is only 100 cars produced per annum. Option only, so around 30-40 cars or 200 wheels.
4. GT500 - option only. 500 cars, and maybe ~100 cars or 500 wheels.
5. Unnamed SUV - no volumes stated, unknown, say 500 cars or 2000 wheels per annum.


Total contracts ~7000 wheels drastically short of the hyped up expansion to 32,000 wheels. Half of this number is on production winding down, so say 5,000 wheels. This is because the OEM models production levels are tiny and they come with options and not all will take up the options as its not compulsory.


In conclusion i'd be very careful with this company's claims of revenue. Production is many times higher than actual sales. And what about profit? It makes losses- hasnt turned a dime since listing. Burning approx $25-30m per year. Market cap is nearly $600m at current prices, it has surged 60% from IPO of $2.60, which is very expensive.


And in terms of costs per wheel. I dont see any adoption happening anywhere at the price levels of $15K retail for carbon track package. Thats too high. Average performance cars are only $60-70k like the Ford GT500. The likes of Porsche make their own in house, as do a few others.

Gt500 is 5000 units per year

[Halba12]

Originally Posted by XR Martin

Gt500 is 5000 units per year

no it isnt
no yearly figure referred to. total production is 5000 units, ive annualised the figure over many years.


https://fordauthority.com/2019/07/20...to-5000-units/


Also its an option only. so u need to take into account, not everyone will go for the option. per year we are looking at around 500-1000 wheels only as u assume 25% will take up the option.

[Bossxr8]

Originally Posted by Halba12

Hi there. The market they 'own' is small. currently they have the following OEM deals


1. Ford GT 2016 & GT350 - these are their main volumes, legacy contracts. say around 3000-4000 wheels as stated. These are also winding down as old models

2. Ferrari- 2 OEM-s the volumes of these are 500 cars or 2000 wheels per annum - these are option only.
3. Renault Megane - This car is only 100 cars produced per annum. Option only, so around 30-40 cars or 200 wheels.
4. GT500 - option only. 500 cars, and maybe ~100 cars or 500 wheels.
5. Unnamed SUV - no volumes stated, unknown, say 500 cars or 2000 wheels per annum.


Total contracts ~7000 wheels drastically short of the hyped up expansion to 32,000 wheels. Half of this number is on production winding down, so say 5,000 wheels. This is because the OEM models production levels are tiny and they come with options and not all will take up the options as its not compulsory.


In conclusion i'd be very careful with this company's claims of revenue. Production is many times higher than actual sales. And what about profit? It makes losses- hasnt turned a dime since listing. Burning approx $25-30m per year. Market cap is nearly $600m at current prices, it has surged 60% from IPO of $2.60, which is very expensive.


And in terms of costs per wheel. I dont see any adoption happening anywhere at the price levels of $15K retail for carbon track package. Thats too high. Average performance cars are only $60-70k like the Ford GT500. The likes of Porsche make their own in house, as do a few others.

And you don't think every performance vehicle builder isn't seriously looking at them. They are in negotiations with a number of them. Demand for carbon fibre wheels will only increase with tighter emissions rules.

And yeah start ups don't make money initially. All the money goes into facilities and getting it all up and going. Rather obvious I would have thought

It's a long game here. If you go in expecting massive short term gains then you are as dumb as a rock.

[Halba12]

Originally Posted by Bossxr8

And you don't think every performance vehicle builder isn't seriously looking at them. They are in negotiations with a number of them. Demand for carbon fibre wheels will only increase with tighter emissions rules.

And yeah start ups don't make money initially. All the money goes into facilities and getting it all up and going. Rather obvious I would have thought

It's a long game here. If you go in expecting massive short term gains then you are as dumb as a rock.

Big leap of faith that one company will be the answer. Negotiations led to that 'unnamed SUV contract'. Can you tell me how many sales that has. Oh wait, they didnt bother to state it, because it wasnt significant.



There are other companies that will look into Carbon wheels. ESE also in negotiations. Many others like GM looking to go in house.

[Bossxr8]

Originally Posted by Halba12

Big leap of faith that one company will be the answer. Negotiations led to that 'unnamed SUV contract'. Can you tell me how many sales that has. Oh wait, they didnt bother to state it, because it wasnt significant.



There are other companies that will look into Carbon wheels. ESE also in negotiations. Many others like GM looking to go in house.

Interesting first 4 posts. Did you just join to slander them?

As was posted earlier, no one else has been able to find a way to mass produce carbon fibre wheels. And many have tried and failed.

[Halba12]

Originally Posted by Bossxr8

Interesting first 4 posts. Did you just join to slander them?

As was posted earlier, no one else has been able to find a way to mass produce carbon fibre wheels. And many have tried and failed.

no one has bothered to produce them, because they are too expensive to promote adoption. E.g. $15K retail for 1 pack or option, one GT500 is $72K. its not economic.


This is not producing them at effective unit costs either and claims of scale havent been proven. Even if they mass produce them, i dont see anyone taking up 32,000 wheels per annum, the oems are small to date, annual production per car wise.

[XR Martin]

Originally Posted by Halba12

no it isnt
no yearly figure referred to. total production is 5000 units, ive annualised the figure over many years.


https://fordauthority.com/2019/07/20...to-5000-units/


Also its an option only. so u need to take into account, not everyone will go for the option. per year we are looking at around 500-1000 wheels only as u assume 25% will take up the option.

Says in the title.
2020 Gt500 limited to 5000 units.

[Halba12]

Originally Posted by XR Martin

Says in the title.
2020 Gt500 limited to 5000 units.

my point is about annual production. it is not 5000 units per annum. You claim it is 5000 units per annum. you are wrong. and certainly Carbon is only an option. so the 5000 figure is not entirely relevant to Carbon.

[Bossxr8]

Originally Posted by Halba12

no one has bothered to produce them, because they are too expensive to promote adoption. E.g. $15K retail for 1 pack or option, one GT500 is $72K. its not economic.


This is not producing them at effective unit costs either and claims of scale havent been proven. Even if they mass produce them, i dont see anyone taking up 32,000 wheels per annum, the oems are small to date, annual production per car wise.

And does increasing production numbers not allow for lower per unit costs?

The whole point of scaling up is to get production numbers up high enough which will drive the costs down, making them more affordable, which in turn will increase potential customers.

If these wheels are affordable for Ford to use then all the high end sports car manufacturers can use them to, if they choose too.

As I said, it's a long game.

But keep going trying to cut them down.

You didn't answer the part about only joining up to talk them down. Do you have a personal issue with CR?

[Halba12]

Originally Posted by Bossxr8

And does increasing production numbers not allow for lower per unit costs?

The whole point of scaling up is to get production numbers up high enough which will drive the costs down, making them more affordable, which in turn will increase potential customers.

If these wheels are affordable for Ford to use then all the high end sports car manufacturers can use them to, if they choose too.

As I said, it's a long game.

But keep going trying to cut them down.

You didn't answer the part about only joining up to talk them down. Do you have a personal issue with CR?

re any claims about the costs or just wild guesses that they'll bring them down sufficiently. They havent given any figures on this. any ideas on the cost of capital to do so. its not free....



The default option for the GT500 is not carbon wheels. It is an option only. Blanket assumptions being made there- that everyone will adopt this, as Ford clearly hasnt adopted them(its not default).



re talk em down - just think people should be cautious making overly optimistic claims is all.


re competitors are coming. Also in talks with numerous OEMs.


https://www.compositesworld.com/blog...-ready-to-roll

[Bossxr8]

Originally Posted by Halba12

re any claims about the costs or just wild guesses that they'll bring them down sufficiently. They havent given any figures on this. any ideas on the cost of capital to do so. its not free....



The default option for the GT500 is not carbon wheels. It is an option only. Blanket assumptions being made there- that everyone will adopt this, as Ford clearly hasnt adopted them(its not default).



re talk em down - just think people should be cautious making overly optimistic claims is all.


re competitors are coming. Also in talks with numerous OEMs.


https://www.compositesworld.com/blog...-ready-to-roll

Did you just join to talk them down? No other posts bar these ones.

[XR Martin]

Originally Posted by Halba12

my point is about annual production. it is not 5000 units per annum. You claim it is 5000 units per annum. you are wrong. and certainly Carbon is only an option. so the 5000 figure is not entirely relevant to Carbon.

You just can't admit that you are wrong.

It clearly states that there will be 5000 2020 model GT500s built.

[Halba12]

Originally Posted by XR Martin

You just can't admit that you are wrong.

It clearly states that there will be 5000 2020 model GT500s built.

5000 ever year? Thats only a once off production line. if its 5000 once of then its not recurring sales..which is what was implied in the discussion by you.

[XR Martin]

Oh and carbon revolution expect to make up to 8000 Gt500 wheels per year.

[XR Martin]

Originally Posted by Halba12

5000 ever year? Thats only a once off production line. if its 5000 once of then its not recurring sales..which is what was implied in the discussion by you.

Once off for 2020, but 2021 is a new year model and probably 5000 for that year model too.

Remember US works in model years, not models like BA, BF etc

[Halba12]

Originally Posted by XR Martin

Once off for 2020, but 2021 is a new year model and probably 5000 for that year model too.

Remember US works in model years, not models like BA, BF etc

thats what i meant. once off. even with 8000 wheels from GT500/annum, the optimistic production of 32,000 wheels, they seem short..the other cars are very very tiny in production e.g. the Renault megane is like 100cars/year. We know ferrari's are tiny production. And theres no profit margin so far either.

They havent named their unnamed SUV production either. so its all guesstimates. My point is that they are overly optimistic.

[Magee]

Originally Posted by Halba12

Just cos CBA - through their investment arms take a stake doesnt guarantee safety. CBA is investing clients funds not their own money through mainly Colonial their investment arm. CBA does not hold shares directly. The company has been burning cash since inception and does not make any profit. The ASX stockmarket is in a bubble phase now, so brokers eager to promote new investment ideas are promoting it daily.

Opened Commsec today to check my shares and happy to see they had gone up again but there was a published notice issued today that CBA is no longer a substantial share holder of Carbon Revolution.

Not wanting to poke the bear, but I can't understand why you are so concerned where I (and other guys here) spend my money. Your just like my wife. Next you will be telling me buying old cars to restore is a waste of money.

[Halba12]

Originally Posted by Magee

Opened Commsec today to check my shares and happy to see they had gone up again but there was a published notice issued today that CBA is no longer a substantial share holder of Carbon Revolution.

Not wanting to poke the bear, but I can't understand why you are so concerned where I (and other guys here) spend my money. Your just like my wife. Next you will be telling me buying old cars to restore is a waste of money.

why are ppl assuming i care about their holdings. was just commenting on the above topic. if there is no contrasting views, there is no point, isnt this a forum.