The chemical giant The Dow Chemical Company (DOW) awarded a contract to Irvine-based Quantum Fuel Systems Technologies Worldwide Inc. (QTWW) to deliver hybrid drive systems to Dow's fleet.
The contract covers the delivery of more than 100 plug-in-hybrid electric (PHEV) pickup truck fleet vehicles based on the Ford F-150 pickup. Quantum developed a new hybrid drive system “Quantum F-Drive” specifically for the F-150, which is one of the highest volume selling fleet vehicles in America. The F-Drive system is a rare combination providing low operating costs through substantially increased fuel efficiency, reliability, low maintenance cost, emission reduction benefits and extended range capability. It also provides a blend of both energy and power. The F-150 PHEV has a 35 mile electric-only range, shifting to hybrid electric mode thereafter, for a total range of over 400 miles.
All the fleet vehicles which will use Quantum's F-Drive will meet Department of Transportation Federal Motor Vehicles Safety Standards, US Environmental Protection Agency, California Air Resources Board emission requirements and incorporate Dow Kokam Lithium Ion batteries.
Dow’s goal is primarily to reduce emissions and dependence on fossil fuel for fleet operations and an effort to convert even 5% of the U.S. to PHEV battery technology would serve its purpose. This strategic move would eventually drive the adoption of energy alternatives ahead of the existing need. Besides, the technological expertise of both the companies and their efforts to bring in the market light duty fleet vehicles meet the performance demands and cost payback requirements of corporate fleet.
Quantum leads in the development and production of advanced propulsion systems, energy storage technologies, and alternative fuel vehicles. Dow Kokam, on the other hand, brings technologically advanced and economically viable battery solutions to the transportation, defense, industrial and medical industries.
Dow Chemical supplies high-performance materials, agricultural products, plastics (polyethylene and polypropylene) and industrial chemicals to industries and consumers globally. The company’s products have a vast array of applications and are used by various industries including farming, construction, transportation, electronics and consumer goods. Dow enjoys a good reputation in sustainability, as demonstrated by its 2015 Sustainability Goals to reduce energy consumption and emissions.
Recently, Dow reported its first quarter of 2011 results. The company earned $0.82 per share in the first quarter of 2011, ahead of the Zacks Consensus Estimate of $0.67 per share as well as last year’s $0.43 per share. However, including one-time charges, the company earned $0.54 per share compared with $0.41 per share in the year-ago quarter.
Quarterly revenues jumped 20% year over year to $14.7 billion and were above the Zacks Consensus Estimate of $13.8 billion. Volume and pricing gains across all business segments and geographical regions, particularly North America and Europe, yielded healthy revenue growth.
Dow anticipates that demand would improve further, especially in Asia with the global economic recovery. The US and European markets have also started showing signs of improvement. Dow is also optimistic on major consumer-markets, including electronics, coatings, automotive and packaging. However, construction markets are expected to remain weak.
DOW faces stiff competition from EI DuPont de Nemours & Co. (DD).
Currently, Dow has a short-term (1 to 3 months) Zacks #1 Rank (Strong Buy) but a long- term Neutral recommendation.
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