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27 November 2024

DG Innovate plc

("DG Innovate", "DGI" or the "Company")

DGI to commence production of Pareta® motors after signing Joint Venture with EVage

DG Innovate plc (LSE: DGI), the advanced research and development company developing pioneering solutions in sustainable mobility and energy storage, is pleased to announce that it has signed a Joint Venture Agreement ("JVA") with EVage Automotive Pvt. Limited ("EVage", together the "Parties"), an Indian electric vehicle maker and automotive technology company, to manufacture and supply a range of DG Innovate's Pareta® e-drives.  This follows on from the Company's announcement on 28 March 2024 that the Parties had entered into a Memorandum of Understanding ("MoU").

Completion of the JVA is subject, inter alia, to incorporation of the joint venture company and execution of ancillary documentation.  This is expected to be concluded over the next few weeks.  On completion of the JVA, DGI and EVage will respectively own 60% and 40% of the joint venture company (the "JV"), which will be named Pareta® India.

DGI will provide the designs for a range of electric motors and licence the associated technology and related intellectual property to the JV, while EVage in turn will lease premises to the JV in Chandigarh, Punjab, and oversee day to day manufacturing activities.  The JV will manufacture a range of electric motors for e-mobility customers, including EVage and third parties both in India and overseas.  DGI will charge the JV a licence fee for each electric motor sold to EVage or third-party customers within India.  The JV will also sell electric motors to DGI for sale into the international market.

Three initial ranges of Pareta® motor are being developed by DGI for manufacture by the JV, with cumulative projected production volumes of approximately 100,000 units over the first four years of production, of which c.32,500 units have been committed to by EVage under the terms of the JVA. The remaining units are internal estimates of projected demand from third-party customers.

·      80 kW motor ("P80"):

o  Target Applications: Light commercial vehicles ("LCV") and compact electric vehicles.

o  Market Potential: The global electric LCV segment is projected to exceed US$150 billion by 2030¹, with significant demand in urban logistics and small passenger vehicles.

o  The P80 has been specified for EVage's current light delivery vehicle, the FR8, and has peak power of 80kW and peak torque of 300Nm.

o  The design of the P80 is now being finalised, with initial prototypes to be assembled and tested at DGI's facilities over the coming weeks.

o  The P80 is expected to be the first motor produced by the JV, with the first assembly line for manufacturing of the P80 established at the JV's facility during the first quarter of 2025, with production expected to ramp up over the following 18 months.

o  The JV is currently projecting to produce over 70,000 units of the P80 over the first four years of production, including 26,000 committed to by EVage under the JVA.

·      150 kW motor("P150"):

o  Target Applications: Mid-sized passenger vehicles, SUVs, and medium-duty trucks.

o  Market Potential: This segment aligns with the global passenger electric vehicle market, which is currently forecast to exceed US$2 trillion by 2030², driven by middle-income consumers transitioning to EVs.

o  The JV is currently projecting to produce over 18,000 units over the first four years of production, including c.5,000 units for EVage.

·      315 kW Motor ("P315"):

o  Target Applications: Heavy-duty trucks, buses, and industrial machinery.

o  Market Potential: The global heavy-duty electric vehicle truck market could surpass US$285 billion by 2030³, especially as fleet operators electrify to meet sustainability targets.

o  The JV is currently projecting to produce over 9,500 units over the first four years of production, including c.1,500 units for EVage.

Commenting, Inderveer Singh, Founder and CEO of EVage said: "I am really delighted to conclude the JV Agreement and look forward to integrating DGI's Pareta® drive technology onto our platform.  The unique design possibilities it brings will allow us to offer unmatched efficiency and performance to our customers.  We expect to supply 100,000 motors over the next four years, with EVage taking over 32,000 units.  I strongly believe the cooperation between the teams will lead to great things for us."

Commenting, Peter Bardenfleth-Hansen, CEO of DG Innovate said: "I haven't been this excited about a product launch since my days at Tesla. I am delighted that we have signed the joint venture agreement with EVage, who are already well-established and growing within the Indian e-mobility space, and represent an ideal partner for the commercialisation of our innovative Pareta® motors.  The establishment of Pareta® India will provide us with a quick and cost-effective route to volume supply for various applications in a major electric vehicle market, with the P80 to become our first commercial product.  This a momentous day for DGI and I look forward to providing further updates in due course."

About EVage

EVage is an electric vehicle automaker and automotive technology company based in Chandigarh, Punjab, India and is engaged in the business of manufacturing and supplying electric vehicles and providing related services. EVage is a supplier of zero-emissions electric vans to global companies, including Amazon and Ikea.  EVage's vehicles employ proprietary battery and vehicle design technologies to achieve best in class performance.

For more information on EVage please see: https://evagemotors.com

1 Mordor Intelligence - Electric LCV Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

2 Precedence Research - Electric Passenger Cars Market Size, Share, and Trends (2024 to 2034)

3 Mordor Intelligence - Electric Truck Market Size - Industry Report on Share, Growth Trends & Forecasts Analysis (2024 - 2029)

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