Axeon shares power ahead on battery test success story

The Dundee-based green energy company's shares soared after it released the results of a two-year study into its new battery.

Axeon said tests on Scottish roads, supported by the Energy Savings Trust, showed the new batteries increased the range of a delivery vehicle by 97 per cent to 241km, compared to its previous battery packs.

Such was the success of the trail, which used a 3.5 ton electric vehicle built by Coventry-based Modec, that the manufacturer now plans to use the packs in the second half of this year.

Shares in Axeon, which have slumped in recent months on funding concerns, opened higher yesterday morning, before surging when it released a statement on the tests yesterday afternoon.

At one point the shares, which are listed on London's Aim, were 97 per cent higher than Friday's closing price, closing up 65.2 per cent at 4.75p.

Axeon chief executive Lawrence Berns, who joined the company in December, said the technology confirmed its position at the leading edge of battery pack technology.

"We are delighted with the success of this project," he said.

Berns added: "It demonstrates Axeon's commitment to staying at the front of battery pack technology and our ability to meet our customers' needs for the development and manufacture of high-performance electric vehicles."

Philip Sellwood, chief executive of the Energy Saving Trust, which funded the study, congratulated the company. "This new technology will help lead the way to low carbon vehicle technologies and give the public more eco-friendly car choices," Sellwood said. "These advances are vital to help cut emissions."

As well as the Modec vehicle, Axeon also provides batteries used in a minicab sold by Glasgow firm Allied, based on the Peugeot Expert. It has also supplied packs for a range of concept cars.

Shares in the company had opened higher yesterday on the reports, played down by Axeon, that Berns had held meetings this month with the firm's principal lender, Ironshield Capital Management.

Ironshield has only granted waivers on Axeon's debt covenants until the end of February, although a spokeswoman told The Scotsman last week that it had "no reason" to believe the terms would not be extended.

Berns was unavailable for comment on funding yesterday and a spokesman for Axeon refused to comment further.

The new vehicles were trialled by John Swinney, the finance minister, at the company's headquarters in Dundee yesterday

BACKGROUND

UNLIKE the now widely available hybrid powered vehicles, which use a combination of a rechargeable battery and a standard combustion engine, almost all of the vehicles using Axeon's batteries run solely on electricity. Using rechargeable battery packs, the vehicles have zero carbon emissions when operating.

The concept behind the technology is not new, but the race is on to come up with vehicles which are practical. Early electric cars suffered from a lack of speed and limited range.

Axeon's new battery appears to hold significant promise, with the latest test enabling a Modec delivery vehicle to potentially travel more than 200km on a single charge, at a maximum speed of 80km an hour.

The batteries are also highly durable, with a three -year warranty.

They are currently only available in delivery vehicles and electric minibuses sold by Glasgow firm Allied, based on the Peugeot Expert. Axeon is developing a new high-range battery for the Daimler Chrysler Smart.