Chasing electric dreams requires a collaborative approach

If ‘electric vehicle’ makes you think of Teslas and BYDs, a visit to Wellington’s waterfront might expand your perception of what an EV can be.

There you’ll find the Ika Rere ferry tied up at the dock, plugged into the EV charging station that juices up her batteries, or zooming quietly away across the harbour towards Eastbourne.

The Southern Hemisphere’s first fully electric ferry launched into service in 2022, replacing East by West’s diesel-powered ferry – instantly cutting the company’s carbon footprint.

It also spawned one of New Zealand’s smallest and newest industrial company clusters, determined to flip the country’s seagoing fleet to electric. 

Constructed by the Wellington Electric Boat Building Company (WebbCo), Ika Rere was a collaboration with McKay, the country’s largest privately owned electrical engineering company. It was founded in Dargaville in 1936, and branched into marine electrical work more than 20 years ago.

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‘We’ll just do it ourselves’

McKay designed and installed the electric propulsion for the East West electric ferry, says Fiona Bycroft, the CEO and co-founder of Whangārei-based Naut, a startup spun out of McKay in 2021.

An engineer by background, Bycroft was McKay’s Northland regional manager when a local customer enquired about converting a boat to electric power.

“We had a look around the world and at that stage, there was nothing that would get a boat planing,” she says.

The fizz boats and jet boats that traverse our coastal waters, rivers and lakes work by popping up and running on the surface of the water rather than ploughing through it. But designing an electric motor with the power to get a fast boat planing while delivering enough range from its batteries to satisfy boaties was no easy task.

“We thought, we'll just do it ourselves,” says Bycroft.

Which is exactly what McKay did, successfully designing a marine electric motor that would fit the bill. With Ika Rere approaching its maiden voyage, McKay saw the potential to become the go-to company for converting jet-powered, shaft-propelled and inboard and outboard engines to battery-sourced electric power.

But McKay is a project company, so the decision was made to create Naut, as a separate product-oriented company. A small team of engineers is developing electric motors that can be fitted onto fishing and family boats like the Haines Hunter fizz boats that zip around the Hauraki Gulf and Bay of Islands. Naut still operates out of the McKay building.

“We’ve developed that startup approach, but we can go and have lunch with the 40 people who sit next to us,” says Bycroft.

McKay and Naut, who received a visit from Prime Minister Christopher Luxon in early March, sit within a larger marine cluster in Northland, which is second only to Auckland as a destination for vessel building, refit and repair services.

“We've got our own sort of mini cluster and we can say to customers, anything from six metres to 30 metres, we can get you an electric vehicle and McKay can do the shoreside infrastructure,” says Bycroft.

Tendering together

The cluster includes WebbCo, as well as three naval architecture companies that formed a company to become a one-stop-shop for naval architecture. With EV Marine in Auckland – itself a spinout company from boat builder McMullen and Wing – developing Fullers’ electric ferries, there’s scope for collaboration to grow as marine electrification gathers momentum. 

Another unrelated EV venture, Ocean Flyer, even plans to run electric seaglider coastal flights between Whangārei and Auckland as part of a joint venture with Northport and Northland Inc. at Marsden Cove Marina. While Ocean Flyer won’t build the seagliders, it expects to create 40 to 100 jobs when it establishes a headquarters, maintenance and training facilities in Northland. Ocean Flyer plans to be operational in 2026.

Bycroft says the members of the nascent marine EV cluster have jointly tendered for work. The process has worked well, and ensuring everyone agrees on the intended outcome is a crucial aspect to getting it right. 

“You can’t have one part of the cluster going, ‘I’m going to get rich out of this one deal’, and the other part going, ‘this is really important for our reputation and we are going to price it really aggressively’,” explains Bycroft.

But it's still early days in the transition to electric motors for marine craft.

“The electrification of vessels at the moment is expensive. Sometimes you'll go through a process and put a fantastic tender in, but the customers are not quite ready to make that commitment.”

Naut ultimately aims to prove its electric motor technology here, with a view to exporting it around the world, which explains the Prime Minister’s visit. The National Party campaigned on an ambitious target to double the value of exports in 10 years to “help rebuild the economy so all New Zealanders can get ahead”.

Advanced manufacturing – which employs technology to add more value to products, improve efficiency and allows exporters to be more responsive to global demand – is seen as key to boosting exports. Building clusters of like-minded companies is a logical move to lift the boat for everyone, says Catherine Lye, the CEO of Advanced Manufacturing Aotearoa (AMA). 

The manufacturing sector employs 222,400 people (11.9 percent of the New Zealand workforce), according to the Technology Investment Network’s Advanced Manufacturing Report 2023. But only around 350 of our manufacturers employ more than 100 people.

“What manufacturers are finding is that they're just not aware of what capability there is in their own backyard,” says Lye.

“A lot of them are just constantly putting out fires; there are so many distractions, they often don’t have the bandwidth.”

Don’t reinvent the wheel

Developing manufacturing clusters “takes strong coordination and facilitation”, but can pay off as firms learn from each other.

“What the sector is looking for in terms of clustering, is to support the acceleration of best practice, and reduce learning curves. There's simply no point in a whole lot of small companies trying to figure it all out on their own, or reinventing the wheel,” says Lye.

The AMA was set up to advance the goals of the Advanced Manufacturing Industry Transformation Plan, which was put in place by the previous Labour Government in consultation with industry and included a plan for regional manufacturing initiatives. With the ITP currently paused while the coalition Government figures out its priorities for the sector, government funding for those initiatives is currently in limbo.

In contrast, Australia’s Parliament has endorsed the creation of an A$15 billion National Reconstruction Fund (NRF) to boost the country’s manufacturing sector. It includes financing and loans to drive investment in technology and supply chain, and an A$3 billion fund for renewables and low-emissions technologies.

The NRF is set to be one of the country’s “largest peacetime investments in Australian manufacturing capability,” said Australia’s industry and science minister, Ed Husic, when announcing the funding.

For its part, the AMA is forging ahead with its efforts to encourage collaboration, forming 10 regional action groups. The Northland group, naturally, feature’s Naut’s Bycroft. Lye says there are three priorities facing the manufacturing sector, which has been under pressure in the current economic climate: investment in new technology, recruitment and upskilling the manufacturing workforce. Overcoming the sector’s old fashioned, blue-collar image is part of the push

“The perception, and its global, is that manufacturing is dangerous, dying, low paid, low tech, really bad for the environment,” says Lye.

Startups like Naut help overturn that perception, but an ageing workforce means the industry needs to make a proactive effort to attract young people.

“Five to 10 years out, you've got a lot of workers who are on the tools who want to retire and get off the tools and we haven't got a pipeline of young people coming into the sector,” says Lye.

As manufacturers introduce new technology – including robotics, 3D printing, automated systems and AI – the existing workforce needs to be taken on the journey, says Lye.

“It highlights the gap between the skills that the workforce have and what they need in order to succeed in this new environment.”

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Smart process, smart products

Our manufacturers have lagged in their uptake of new technologies that could give them a competitive edge, according to Sean Doherty, Callaghan Innovation’s product manager for Industry 4.0 and advanced manufacturing.

“There’s a lot of piloting going on, people are dipping their toes in the water. We're a bit far behind and we really need to do the catch-up game,” he says.

“Our surveys show that the biggest barrier to adopting the technology or moving forward with productivity improvements is having cash to invest in it.” 

The term ‘Industry 4.0’ often implied high-cost digital transformation. Doherty, however, prefers to talk about “smart process, smart products” with New Zealand manufacturers and has dozens of case studies illustrating how small changes, such as introducing digital lean methodologies, led to dramatic improvements in factories and on production lines. 

“Digital transformation is a bit like going to the gym,” he explains. “I can turn up to the gym once or twice a week and lift some weights. But it’s not a transformation. If I turn up every day, and bulk up, get fitter, that is a transformation.”

 Getting on the pathway to “continuous improvement” is key for our manufacturers, he says: “Getting data into some sort of database so they can gain insights.” 

“The problem is it can be very much an ad hoc business-case approach rather than a strategy. A project may not go ahead because the cost is $1,000 a head. That may look expensive for one use case, but if the data is used across a number of use cases, it becomes cost effective.” 

Back at Naut, Bycroft and her engineering team are working on the company’s first product – an electric inboard motor that can be added to popular motor boat models. An electric outboard motor will follow. The company raised $1.5 million in seed funding last year and received a $500,000 grant from the Energy Efficiency and Conservation Authority’s Low Emission Transport Fund. 

The elephant in the room for boaties when it comes to electric motors is their range compared with petrol or diesel-powered engines.

“We were able to get data for 4,000 boat trips taken from Westhaven Marina, and our boat would have been able to do 70 percent of the trips. Going over to Waiheke for the day is just not a problem,” she says.

“New Zealanders go further and faster than anyone, anywhere else. If we can satisfy New Zealand users, what we produce will satisfy the rest of the world.”

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