A Michigan-China connection

Apr 11, 2008

Kyle Schwulst found a bull market for his invention to reduce harmful emissions in small engines when he took it to China.

There are two Chinese “scooters” on the dynamometers, not far away stands a prototype all-terrain vehicle (ATV), and also the “to do” project list are parts for an un-piloted reconnaissance aircraft for the Defense Department.

For the four full-time and two co-op employees at ElectroJet Inc., an engineering design firm based in Brighton, Mich., the work just keeps pouring in. “Our recent new customer demand necessitated the hiring of more employees to handle the work,” said Kyle Schwulst ‘02, owner and president of ElectroJet. “Between the projects in China, military projects and other U.S. projects we need a fair number of people to manage all the work,” he added.

Despite the work load, the engineering team is having a blast in this fledgling company. In-house testing, the flexibility to design new systems without going through corporate channels and the freedom to think outside the box of current manufacturing constraints make the work exciting. It’s also fun – especially when they get to test drive the projects.

Currently being tested, both on the dynamometers and in the woods, are a prototype ATV engine for Arctic Cat and two versions of Motochu 150cc “scooters” common in China.  “We’re up to our fourth revision of engine controllers for this ATV,” said Schwulst, “this latest version will incorporate all of ElectroJet’s latest refinements including real-time calibration.”

The Motochu 150cc scooters include a “ride on” style – more like a tradition motorcycle, and a “step-through.” “They are manufactured for $550 and sell for about $600,” said Schwulst of the Chinese products. “It’s hard to add to that purchase price with expensive emissions controls devices. Our product adds only about $20 to the cost which is still affordable in China,” he explained.

The ElectroJet product is an electronic fuel injection system for small engines designed to help manufacturers of ATVs, lawn mowers, scooter and small motorcycles meet Environmental Protection Agency (EPA) emissions standards for 2010.

Schwulst has secured the Chinese version of his U.S. patents for the post-production fuel injection system giving him a distinct market advantage in a country where 20 million motorcycles and scooters are made every year.

“Our partners in China will make part of the product and we’ll make the electrical component,” he said. “This will create jobs in both Michigan and China. We will send the technology to China to be assembled into the final product. Because the assembly will be done there, it will be considered a Chinese product and can be sold in China. The intellectual property is in the circuit board, so we retain control of the technology,” said Schwulst.

A big advantage to partnering with Chinese manufacturers is that ElectroJet will not have to renegotiate its status with every new product. “We will simply introduce new technologies and products through our partner companies in China,” said Schwulst, adding, “we are very close to finalizing contracts with Chinese companies.”

Fortunately, ElectroJet’s products meet two of China’s manufacturing requirements; they reduce emissions and improve fuel savings.

Contracts in China will translate into big returns for the company. China approved European emissions standards in July of 2007. These emissions standards are more stringent than those in the U.S. So far, no manufacturer of scooters and small engines in China has yet been able to meet those standards with existing technologies, according to Schwulst.

“If we can produce convincing data that our product will address the emissions issue effectively,” said Schwulst, “we may be offered a government contract in China to incorporate our product into a large percentage of Chinese-made scooters and motorcycles. Currently, our product is more cost-effective that those of our Chinese competitors,” he added.

Electrojet has signed letters of intent to partner with companies in China to produce the EFI systems for motorcycles and scooters, the primary means of transportation in the country. The letters represent a billion dollars in contracts for Electrojet, according to Schwulst.

In addition, the company is working with one of their partners in China to “set up a ‘clean city’ in China as a living laboratory,” said Schwulst. The plan is to work with local government to require all scooters and motorcycles in a popular tourist port city to add an Electrojet EFI system to reduce emissions. The idea is to use this “clean city” as a model to demonstrate a cost-effective way to meet the European emissions standards that can be replicated throughout the country, said Schwulst.

Despite a number of military projects, including components for an un-piloted reconnaissance aircraft, Schwulst finds the North American customer base for ElectroJet sluggish. “We don’t see the sense of urgency that we’re finding in China and India. These countries are the top two consumers for our products,” he said.

“If we weren’t going global it would be hard to pay the bills,” said Schwulst. He attributes the ambivalence of the U.S. market to the current political administration. “Environmental regulations in the U.S. have been rolled back to match those of California so they are easier to meet,” he said.

“We’re trying to promote our product as functional, while exceeding emissions regulations and still meeting EPA price points for modifying vehicles. It’s ironic that we’ve had better results working in China, yet the EPA is only 15 minutes away from our facility,” he said referring to the EPA laboratory and offices in Ann Arbor, Mich.

EPA emissions standards for 2010 require manufacturers to reduce emissions for off road motorcycles (ATVs) to 57-80 percent from previous standards. Manufacturers of utility engines (lawn tractors etc.) also need to comply with the 2010 emissions standards. The fuel injection system developed by ElectroJet is designed to fit existing engines and will enable the products to meet or exceed 2010 EPA emissions standards.

In one application, ElectroJet's product has been shown to reduce CO2 by more than 70 percent when compared to the same engine using a carburetor.

Even though the U.S. market is sluggish for ElectroJet, Schwulst has found a supportive environment in which to grow his business. He credits the State of Michigan, the Department of Agriculture, Ann Arbor Spark, and Automation Alley with providing the financial support and professional mentoring necessary for Electrojet to “get off the ground.”

“There is so much I do on a day-to-day basis that I have never done before,” he said, “I am an engineer by training. To have the support and access to the high quality advice I have received through these entities is invaluable.”

Written by Dawn Hibbard