The Little Engine That Might

While the United States is the world's biggest market for automobiles, there are far bigger potential markets out there that the industry is determined to tap. China is tops, but India, with its 1 billion-plus population and burgeoning middle class, is not far behind. In some ways, India is better suited than the West to experimenting with transportation technology. There is no ingrained car culture, no tradition of unlimited personal mobility.

Years of using primitive gas and diesel engines have left India's cities choking on pollution, so the government has required that public transportation in cities switch to using alternate fuels. Natural gas is popular at the moment, but rechargeable battery-powered vehicles are well-suited to the type of driving done in India -- limited speed, an average range of 40 miles a day or less and lots of stop-and-start traffic. The energy generated by braking, which on a gas-powered car is lost as heat, can be captured to help recharge a battery.

India's Bajaj Auto Ltd., one of the world's biggest producers of scooters and three-wheeled autorickshaws for crowded city streets, went looking in the late 1990s for a company that could help it convert part of its product line to electric propulsion. It teamed up with New Generation through the U.S. Agency for International Development.

New Generation agreed to develop small, cheap motors for autorickshaws. Over seven years, Bajaj invested some $3 million into new machines and tooling so its factory could build the motors. New Generation stripped itself down to the bare minimum number of employees to concentrate almost solely on the autorickshaw job, hiring Sethi, 32, last year and grooming him to move to India to be a full-time liaison with Bajaj.

"Their technology is unique," says Tapan Basu, Bajaj's head of production. "We're always looking out there. We haven't been able to duplicate this with anybody else . . . We had an exciting chance of working with an advanced technology that was not sewn up by the Big Three."

The partnership is close to a turning point. A test fleet of five electric auto-rickshaws carries visitors within the Taj Mahal complex, which is off-limits to internal combustion engines. If the first 60 production models sell well later this year, for roughly $2,500 apiece, Bajaj will build 1,200 next year and aim for as many as 12,000 in 2006. That year, New Generation expects to become profitable for the first time.

For New Generation, everything hinges on surviving until production starts next spring. Because the Bajaj effort has been so all-consuming, the company doesn't have much else to sustain it, and the financial tanks are running dry. The company has considered firing almost all remaining employees and putting the company in "hibernation," but it wants to be ready to take off on other projects as soon as the Bajaj revenue starts flowing. That's why the push is on to get investors or grants for the coming year.

If New Generation can get past the production start-up, wild possibilities open up. Bajaj could decide to put electric motors on two-wheeled scooters; it builds 1 million of those a year. New Generation also has the right to buy its own time at the Bajaj factory, and could use it to build motors for other clients in other locations. With a product geared for mass production and the means to crank it out on a large scale, New Generation could finally be on a path that leads, realistically, back to Detroit.

As the company has worked its way to this position, though, the rest of the world has not stood still. Bodine Electric Co., based in Chicago, now produces a competing pancake-style motor that made a strong showing at last year's American Solar Challenge cross-country race. And not 10 minutes from New Generation's offices in Ashburn, another company has emerged that could pose a serious threat -- WaveCrest Laboratories, which also makes electric motors that fit into the hub of a wheel, and also claims to have technology far more efficient than that of the typical motor.

It's hard to compare the two companies' products, because both WaveCrest's and New Generation's are still in the laboratory stage. WaveCrest's advances are largely based on the software used to control the motor, instead of on the configuration of the motor itself. The company has taken a different approach to the market, as well. With the generous backing of a single angel investor -- Alan Anderson, who the company says has a background in software and biotech ventures -- WaveCrest has taken a route more similar to the classic Internet startup, spending millions to establish a name as well as a technology. Retired Gen. Wesley Clark served on the board of directors until embarking on his failed presidential bid. Former Chrysler product development chief Richard Schaum, a well-known figure in Detroit, is now a WaveCrest vice president.

The company makes no bones about its goals: It wants to take Detroit by storm. Last year it opened an office there. To help attract visitors, the company brought a futuristic Smart car from Europe -- a two-seat commuter roadster -- and replaced its engine with electric wheel-hub motors to show off the technology's capabilities.

At 120 employees and climbing, WaveCrest has a 30,000-square-foot headquarters building with landscaping, a receptionist and security badges for visitors. Its laboratories are big-league all the way, with pristine metal-topped worktables, battleship-gray floors and clean white walls. The engineers even wear crisp white lab coats.

Where New Generation's one successful commercial product -- solar car motors -- is sold to a small group of in-the-know academics, WaveCrest recently went commercial with a tough-looking motorized mountain bike. At $2,400 each, the bikes have begun attracting notice from hobbyists, police departments and the military. They're great calling cards for a company looking for attention.

It's impossible to say whether WaveCrest will be any more successful than New Generation at breaking into the industry in Detroit, or even in achieving that lesser goal, survival. The two companies have checked one another out, even talked of partnership. But WaveCrest president and chief executive Roy Barbee dismisses New Generation now.

"I think they've come upon fairly hard times," he says. "I would say we are ascendant. I'll leave it to you to decide if that's what they are."

It's a Friday night three weeks after that first venture capital get-together. Takamura is at his Capitol Hill rowhouse, cooking pasta with sausage marinara as his wife and 2-year-old son sit at the kitchen island.

This is rare family time. Holly Takamura has been spending weekdays in Florida on a consulting job with her software company. Little Kalani, with a mop of dark hair, sits close to his mom as they draw pictures with crayons. Once upon a time, Friday night would have meant going out to clubs with friends. Holly Takamura still makes it out once in a while, and winds up telling her husband what he missed. Eric Takamura is too absorbed in his work. A year ago, he cut off his shoulder-length black hair. It was time to face up to what his life has become.

Takamura has at least tasted the kind of life he wanted, the French-uncle life. He goes to India a few times a year. He's been to Egypt, trying to work out a deal to put motors on buses. And New Generation itself definitely counts as uncharted territory.

Word has come back from the venture capital group. New Generation has been invited to return for the next phase of competition for funding. Tonight, after Kalani goes to bed, Takamura will stay up late filling out the final application. In a few weeks, he'll make his formal pitch to the potential investors, then wait to see if anyone steps forward with an offer of money.

Jermakian, too, has gotten good news. He won the government research contract for $200,000. Things seem to be looking up.

Still, it doesn't surprise Takamura to hear that Barbee believes WaveCrest is ascendant and New Generation is faltering. He shrugs. "If you're talking about who has the most people working for them or the best facilities, then, yeah, they're ascendant," he says. "But in terms of technology" -- he frowns and shakes his head -- "ours is better."

After all this time, he still believes. Maybe he has to, because that's the only reward for so much effort. At one point, he figured he could have made the same amount of money by working the same number of hours at McDonald's.

"If things keep going, this will have a dramatic impact on the road for people to come -- like the little one here," he says, gesturing at Kalani. "There's satisfaction in that. But I'm not sure how satisfying it would be if it failed."

Greg Schneider writes about the auto industry for The Post's Business section. He will be fielding questions and comments about this article Monday at 1 p.m. on www.washingtonpost.com/liveonline.