Release Date: February 18, 2004

New Hybrid Design Breaks HEV Price Barrier

Small Michigan Company Takes on Toyota Juggernaut

Munising, MI – As Toyota rolls across the automotive landscape, gobbling up the number two spot from Ford Motor Company and hungering for more, a small R&D company in Michigan's upper peninsula is sharpening its technological sword.

After more than three decades of experience working with hydrostatic drives and more recently with boundary layer turbines, PNGinc's CEO Ken Rieli is offering a new cost-cutting hybrid design to the automotive world. The new drivetrain that his company is developing is called the KE Drive™ (Kinetic Energy). And according to PNGinc's market analysts, their turbine-hydraulic hybrid drivetrain design will cost $2,000 less to build compared to diesel-powered HEV (hybrid electric vehicle) systems.

Based on a mix of off-the-shelf hydraulic-accumulator systems components and proprietary disk turbine technology, the KE Drive™ is designed to enable Michigan's auto companies to take the lead in the growing hybrid vehicle market.

Currently Japan is leading the world in HEV sales, and appears destined to preempt U.S. automakers for decades to come. By 2012, Toyota projects that 90% of its production will be hybrid vehicles, making it imperative for OEMs to secure new hybrid drivetrain technology to compete head-to-head with the Toyota lead assault.

The stakes are high. Michigan has lost 185,000 jobs since Bush took office in January 2001, and more cuts are inevitable as GM and Ford continue to lose market share. Overall, the U.S. is expected to see an 11 percent drop in automotive production jobs by 2010, according to a study conducted by Roland Berger Strategy Consultants for the Original Equipment Suppliers Association.

The outlook at PNGinc's headquarters remains positive. "The key to automotive growth in the 21st century is to deliver new drivetrain technology with higher performance, better pricing and lower emissions that will satisfy a new generation of buyers, and reverse environmental damage," says Rieli. "Our turbine-hydraulic hybrid system, when fully implemented, will deliver on all of these points."

For more information on how OEM's, suppliers and investors can get involved, E-mail Pam Rieli at ventures@phoenixnavigation.com

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