AC Propulsion: The EV OGs Who Aren't Changing The World

The LA Times interviews AC Propulsion’s Tom Gage, and sheds some light on what an actual, honest-to-god profitable EV firm looks and thinks like. The short version? Think of the exact opposite of Tesla and you’ll be getting close.

Gage claims to have been a car nut from birth, and after getting an engineering degree from Stanford he worked as a race mechanic before getting an MBA and working for Chrysler for eight years. After working on an abortive plug-in program at Chrysler, Gage left and ended up at AC Propulsion after being impressed by one of its Honda Civic EV conversions.

Besides getting into the EV game way before it was cool, AC Propulsion’s attitude towards its segment is what seems to set it apart from its competitors. AC had sold its own EV version of the Scion xB, and engineered the Tesla Roadster’s forerunner but it’s stayed small and dropped older projects for new opportunities like developing BMW’s MINI E.

In contrast to Tesla’s staggering ambition, Gage knows that AC will not someday become the GM or Toyota of EVs for the simple reason that Toyota or GM will become the Toyota or GM of EVs. “When you see the precision and scale of a huge auto factory, you realize just how hard and expensive it is to mass-produce cars,” he says. “Making parts for 10,000 or 100,000 cars is too much for us. Our goal is to be a participant in the early part of the process and then plan a timely exit.”

AC Propulsion’s deep experience and reasonable ambitions create another unique phenomenon in the rhetoric-over-substance world of alt-energy propulsion: profit. AC’s 35 US employees and 40 Chinese workers assemble about 40 drivetrains per month, each of which sell for about $25k. “We’re very profitable, and that distinguishes us from just about everybody in the business,” Gage says.

And the pragmatism that Gage brings to AC is evident in his daily life. Where the Elon Musks of the world would rather be dead in a ditch than be seen in an un-eco-friendly-appearing vehicle, Gage admits that he often has no choice but to fire up an old internal combustion engine. In addition to a MINI E and an “eBox” (xB EV) he also owns a Toyota and a pair of Volkswagens.

But then AC’s business model isn’t dependent on “change the world” hype. “It’s always been about modifying cars to make them things that people want to drive,” Gage says. Plus, turning a profit never hurts.