Revolutionizing Urban Transport

British startup Ultra Motor is bringing its two-wheel light electric vehicle to the U.S. With cities crowded and oil prices high, the time is right

by Jennifer L. Schenker

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Back in the Cold War 1970s, a Russian radio transmission specialist stationed in East Germany dreamed up a new, more efficient electric motor that could produce 35% more torque for the same amount of power. Vasily Shkondin's idea could have remained in obscurity behind the Iron Curtain, but today it's the centerpiece of a bold bid to reshape urban transport.

It has taken decades of refinement, millions in venture capital, and the audacious vision of a 31-year-old U.S. chief executive, but Shkondin's motor is going global. A six-year-old British startup called Ultra Motor is using the patented Shkondin design to power a range of affordable, nonpolluting electric scooters known as "light electric vehicles," or LEVs.

The company already has sold more than 25,000 units in India, racking up $20 million in revenues during its first full year of operations. Now, Ultra Motor is set to roll out a more luxurious version in the U.S. this summer, followed by European models later in the year.

The Dawn of the Personal Mobility Vehicle

Ultra Motor may be hitting a sweet spot. All over the world, concerns over pollution, traffic congestion, and energy costs are prompting consumers, companies, and governments to embrace cleaner, cheaper, and smaller vehicles, including electric or hybrid-electric cars and two-wheeled electric vehicles.

"2007 is when the world officially recognized that the adverse affects of climate change are real and here to stay," says Ultra Motor's globe-trotting Chief Executive Officer, Joe Bowman, who is based in Moscow. That awareness—coupled with soaring gas prices—has brought about "the dawn of a new personal mobility era," Bowman says, "We are seizing the opportunity."

Ultra Motor is already remarkably global for a small company. Headquartered in St. Edmunds, England, and employing 180 people in eight countries, it does research and development in Shkondin's current home of Pushchino, a former Soviet "secret" city 75 miles south of Moscow that didn't even appear on maps until 1991. A well-known German LEV designer named Norbert Haller handles industrial design. Product development takes place in Taiwan, while the motors are made in China and the vehicles are assembled in India and Taiwan. So far, Ultra Motor has scored $25 million from Russian and European investors and is currently raising a $40 million private equity round.

Finally Filling a Real Need

In India, Ultra Motor has a 50-50 joint venture with the Hero Group, one of the world's largest manufacturers of two-wheeled vehicles. During their first year of operation, the partners opened 165 retail franchise stores across India, with plans to open a total of 700 stores over the next three years. The Ultra Motor models in India, which are marketed locally under the model names Maxi and Velociti, sell for $750 to $900.

To position itself for entry into the U.S. market, Ultra Motor acquired Los Angeles' AECF for an undisclosed sum in September, 2007. AECF was founded by electric-vehicle pioneer Ed Benjamin, and Mike Fritz, the former chief engineer for Lee Iacocca at EV Global Motors, the venture Iacocca formed when he left Chrysler in the mid-1990s.