By on November 23, 2021

 

GM

Making waves, treading water – the list of puns for this type of investment is nearly endless. In a deal reported by The Detroit Free Press, General Motors has plowed $150 million into a Seattle-based startup company called Pure Watercraft. The outfit makes electric outboard motors and batteries for marine applications.

To be clear, all references to this deal makes sure to point out that the sum touted by both parties includes both “in kind commitments and capital”. This makes it tough to determine just how much cash The General has transferred from RenCen to Pure Watercraft, especially since those in the know ain’t talking. Referring to “in kind commitments” could mean anything from marketing advice to the use of a warehouse, the value of which is often determined by the company supplying the largesse.

This can be troublesome when trying to ascertain the actual value of a deal. For example, your author could claim he gave $1 million of in-kind services when he toiled for three days building a new deck for a family member. I might think the effort was worth that amount, but the open market surely does not.

In any case, GM now lays claim to 25 percent of Pure Watercraft, a ten-year-old company that bills itself as the purveyor of lithium-ion battery packs which are claimed to have the equivalent of 50 horsepower. Their R&D department has apparently been busy, since their website details advancements the team has made in developing a proprietary gear set and motor control design. This years-long research has apparently resulted in a system that runs quietly with less vibration than some other market options.

So what is GM’s endgame here? It could be getting access to that so-called silent tech, though The General’s EVs aren’t exactly noisy. Perhaps they jumped in bed with this company for modular power, touted by Pure Watercraft as a stowable battery pack system. Each pack has 8.8 kWh of juice and can be connected in series for larger capacity applications. They weigh just over 100 pounds each and measure about two feet long by roughly a foot square. Silverado PHEV with a couple of these batteries under the bed, perhaps?

Ok, that’s not likely to happen given GM’s investment in their own Ultium battery technology. If anything, it’ll be the other way around. Suits at RenCen specifically said they’re investing in this company with an eye towards “future zero-emissions marine product offerings”. Specifically, they’ll further develop tech for BEV watercraft, deploying some of The General’s battery technology to help push the industry’s transition to electric power. Remember, GM has its fingers in many pies including rail and aerospace. They’re not all about Silverado and Sierra pickups, no matter what we gearheads like to think.

[Image: GM]

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41 Comments on “Offshore Funds: GM Sinks $150 million into Electric Boat Company...”


  • avatar
    FreedMike

    Good business is where you find it.

    -Dick Jones, Senior Vice President, OCP

  • avatar
    Astigmatism

    Interesting move. Boating is a money-losing industry for just about everyone in the long run, from the boater to the yard to the manufacturers, with few exceptions. I have an electric outboard on my dinghy but have never heard of these guys (though granted my electric is a tiny toy compared to the ones they’re putting out). Very curious what their strategic play is here.

    • 0 avatar

      I worked in the marine industry most of my life. While many people fail at boatbuilding etc, there are plenty that have made alot of money at it. I wouldn’t say it’s an easy business but it can be a decent one. The biggest issue is it’s all discretionary spending and little falls in the economy can mean big trouble to a recreational marine company. In order to survive and grow like Brunswick Marinemax etc, you need to have some diversity of products and services and a stable balance sheet. Large borrowing is what sinks the vast majority of marine companies. They can’t cover the debt in a downturn.

      • 0 avatar
        sgeffe

        I can’t imagine buying anything that Brunswick is building!

        The late 1980s-early-200s Sea Rays were just awesome! Now? A 35-foot bowrider?! And some of the larger cruisers make the Lexus grilles look good!

        Is Bayliner still a viable entity? What was the upper-end line of Bayliners that was supposed to compete in the Sea Ray realm?

        • 0 avatar

          Brunswick still sells well they are chasing the marketshare with their current designs. Giant day boats is the core of the over 25′ market now, so boats that built the Searay name like the old sundancers just don’t sell well anymore. Same thing with Boston Whaler (another Brunswick brand). A few years ago Brunswick considered selling Searay but couldn’t find a buyer. From what I have heard Brunswick doesn’t want to deal with small volume production so has killed anything off that they can’t sell in high volumes. This meant killing all their yacht business which was high margin but very low volume and labor intensive.
          Bayliner sells better in other countries then the US. Thanks largely to Brunswick ignoring it for a long time. They are back to just entry level models in the US. Back in the Day Bayliner had it’s motoryacht series that was basically a nod to it’s home market in the PNW. Brunswick spun that off into Merdian yachts then killed it off as the market for traditional motor yachts basically dried up.
          On a side note the founder of Bayliner Orin Edson was the only Billionaire I know of who made all his money in boats.

  • avatar
    pmirp1

    GM has wasted so much money on trying to diversify.

    I recall a day they went all in buying EDS. Ross Perot laughed all the way to bank. Why? What did that do for GM?

    Then I remember they bought Hughes helicopter. Who knows may be some of the on star technology is from Hughes helicopter. I still question that move.

    More recently I start getting emails from friendly General about it wanting to sell me car insurance. Because I am sure my onstar on my Vette gives them lots of information. I shall never leave my friendly State Farm insurance agent who has stood by me when tornado ripped my roof and replaced it without much arguing. Or gave me good value on hit and run accident when my vehicle was totaled at the time. State Farm is the best insurance company (may be not the cheapest).

    Instead of these new lines of business, it should invest in good infrastructure for electric vehicles to compete with Tesla. What a wasted opportunity.

    • 0 avatar
      redapple

      pmi>

      GM is clown show. They paid for my college – 5 years. I worked there for 10 years. I was a supplier for 15. In every case, when compared with peer org., GM is a rotting stinking hoor house.

      State Farm. Top Quality. No Hassles. Rates cheaper than my USAA quote. 5 stars.

  • avatar
    28-Cars-Later

    Electricity and water, what could go wrong?

  • avatar
    redapple

    General Dynamics Electric Boat Division is outstanding and cool. (I used to make depth gauge components.)

  • avatar
    JMII

    Electric trolling motors are the norm and have been for decades. Not a real a problem even in saltwater as long as your connections are water tight.

    The problem I see with electric outboards is the battery weight. According to this companies website it appears you need 236lbs worth of batteries for a small (17′) fishing boat. An ICE outboard would only need about 1/2 that weight in gas and easily yield double the range.

    Boat engines tend to run at either very low or very high RPMs constantly. And of course you get no re-gen under braking. So its a totally different application of the technology then a car. I too assume GM’s interest here is in the battery tech.

    Outboard maintenance is a pain so having an electric boat would be awesome, but this likely only works for certain niche applications (as their website shows). Basically smaller boats that can deal with a limited range. One of the problems in boating is weather conditions can have a HUGE effect on range, you can find yourself fighting waves, currents and tides. The norm is a rule of thirds – 1/3 fuel out, 1/3 of fuel back in, 1/3 fuel in reserve. Unlike a car running out of juice where your just sitting roadside feeling stupid when a boat dies you are adrift and depending on the body of water this could become a very ugly situation quickly.

    • 0 avatar

      Battery weight is the big issue. Running a planing boat means the engine is loaded almost all the time, unlike a car where it’s not working very hard alot of the time (coasting down hills sections etc). that’s one of the reasons fuel economy tends to be pretty bad on most boats. Add in that regen isn’t a thing (other then some niche markets like cruising sailboats)and you need very large battery packs for a day on the water. One of the biggest players in this market Torqueedo, has a partnership with BMW to make batterry’s for example. For a while they were showing a 18′ with a 40-50hp electric outboard that required almost a thrid of the boat be taken up with batteries 1000lbs worth that gave a 2 hour run time at half throttle and 40 minutes at full throttle (about 35mph).

      • 0 avatar
        Astigmatism

        My ePropulsion is a great little motor with a battery that’s at least light enough to be easily portable, and the whole thing is a cinch to lift from the dinghy to the main boat, but I had to resign myself to never planing again when I bought it. At four knots I can go as far as I realistically want, but boy does it take a while to get there. That said, the tradeoff in ease of maintenance is worth it.

    • 0 avatar
      golden2husky

      JMII – SeaTow is your friend…and yet one more boating expense. I’ve adapted the OPB for enjoying the water…Other People’s Boats…

  • avatar
    SCE to AUX

    Lots of people are doing electric boat propulsion, so I wonder why GM chose this particular one to invest in.

    BTW, they recharge at the dock using the same CCS protocol as a car.

    Over in Euro-land, there are even some electric ferries doing daily service.

    • 0 avatar

      I have seen this company pop up a few times, and I’m pretty sure I have met a few people that work there back when I was doing boat electrical for a living. This company seems to be pretty aggressive in the startup finance world in general, aggressively seeking funding and trying to put themselves out there as the Tesla of boats. I have a feeling their success is partly driven by this visibility (and hiring the right PR and finance people) then actual product ideas.

      GM powertrain it should be noted already does a large business in the marine world. They sell a lot of v8 engines to people like Volvo Penta and Marine power. I assume this deal may partly be a way to hedge bets on the future of that business.

      • 0 avatar
        sgeffe

        Mercury Marine as well, I’d assume.

        • 0 avatar

          Oddly enough about 5-6 years ago Mercury started moving away from GM engines to their own designs cast in their own factories. Lot of similarities to GM blocks thou.

          • 0 avatar
            Carlson Fan

            “Oddly enough about 5-6 years ago Mercury started moving away from GM engines to their own designs cast in their own factories. Lot of similarities to GM blocks thou.”

            Did they they choose to do that or were they forced to go that way? I heard the latter but never looked into it to verify one way or the other.

            The present boat market in Minnesota(land of 10,000 lakes) is completely different than when I got into boating back in 1990. The 16′-20′ trailerable family bowlders powered by GM I4, V6 & V8 engines mated to Mercruiser sterndrives that were everywhere are gone!

  • avatar
    kjhkjlhkjhkljh kljhjkhjklhkjh

    Executive meeting:

    “Oh look we found a paltry 150 million in the couch cushions…”

    “put it in some bullstuff ‘green’ company to make us look greener and get more environmental credits..”

  • avatar
    Stanley Steamer

    What does it mean? Amphibious Escalade in my near future! (I hope)

  • avatar
    MRF 95 T-Bird

    I grew up reading the GM annual report that my parents received every year since they were shareholders. I’d flip through it marveling at the GM vehicles particularly those in other markets like Holden and Opel. But what bemused me was the products produced by other divisions like Fridgidare and the locomotive Electro-Motive Division. When they started to get rid of these profitable divisions for the sake of shareholder value they became along with other reasons like vehicle issues a declining organization.

  • avatar
    Jeff S

    Elon has a point the MBAs are more concerned about cost cutting and no little if anything about the products their companies make and sell. GM needs to get back in the business of making attractive and quality made vehicles. I remember a time when GM made good quality vehicles that people actually wanted and so does Pepperidge Farm. Quality and desirability have become a fading memory for GM, Ford, and Stellantis.

  • avatar
    28-Cars-Later

    Just an opinion for the editor, why do you maximize the size of the blue GM logo? I ask because it really makes it look even more ridiculous blown up than if it were a more manageable size with a white border around it.

  • avatar
    Farhad

    How much I hate that stupid logo. Linux Mint shall really sue them!

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