LONDON (Alliance News) - Vehicle fuel-efficiency technology firm Torotrak PLC said Monday it is switching its strategic focus to concentrate on kinetic energy recovery systems, as it suspends development of its V-Charge supercharger product.
Torotrak said although the V-Charge product has been proven to work and deliver fuel savings benefits, an "accelerating focus on electrification projects" and increased regulatory attention on reducing emissions is likely to "materially reduce the mass market opportunity for V-Charge in passenger cars, especially in Europe".
Therefore, further engineering development of V-Charge will be suspended although its commercialisation process will continue.
Shares in Torotrak were down 25% at 1.36 pence in early trading on Monday.
Engineering and cash resources will instead be focused on KERS products. Torotrak said its first product, an energy-recovery system for excavators and wheel-loading shovels, is on track to launch in the second half of 2018. Torotrak is also in discussions with on-highway commercial vehicle manufacturers over the potential to adapt the KERS technology.
An employee consultation process with a proposal to "consolidate engineering resources" will also be launched. Torotrak said it is also exploring other actions to reduce its cash operating costs.
"The clear shift towards electrification and the move away from diesel engines that has occurred across the industry over the last few months has forced mainstream passenger car Tier 1s and OEMs to refocus their investment on electrification projects. We will take the appropriate actions to prudently manage our resources," said Adam Robson, chief executive of Torotrak.
"We will focus our efforts on delivering shareholder value from KERS which is addressing the off and on-highway markets in which mechanical solutions remain attractive, and we will continue to work to unlock value from V-Charge. We remain determined to realise the value from our extensive intellectual property and attractive commercial opportunities," added Robson.
By Adam Clark; adamclark@alliancenews.com
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