At BGV, we back technical storytellers tackling tough challenges, and our investment in Intramotev reflects this commitment. Intramotev, led by Tim Luchini (CEO), Alex Peiffer (COO), and Corey Vasel (CTO), is revolutionizing rail freight through electrification—a much-needed upgrade, as only 0.84% of U.S. railways are electrified, ranking the United States as 76th globally and behind the likes of China (66%), India (90%), and Japan (75%). This staggering gap highlights the urgent need for innovation in one of the most critical sectors of our supply chain.
The U.S. rail system is nearly 200 years old, dating back to 1827 - predating the Gold Rush, the U.S. Civil War, the invention of the telegraph, and even the independence of the state of Texas (which happened in 1845). Today, despite its age, rail freight remains essential to the U.S. supply chain for the transport of bulk goods, raw materials, and other mission-critical supplies. Whether it’s grain, coal, chemicals, agricultural products, or even crude oil, many of the country’s critical goods interact with rail in some capacity during their respective transportation life cycle. As founder Tim put it: “if it’s coming out of the ground, it’s going on rail.”
To put this into context, according to the Association of American Railroads, U.S railways move roughly 1.6 billion tons across nearly 140,000 miles of track in a typical year; this translates to nearly 31 million tons in a typical week, or 59 tons of goods per American per year. Freight still accounts for nearly 40% of U.S. long-distance freight volume in terms of mileage, which exceeds that of any other mode of transportation.
To the casual observer, rail freight may not seem like an industry ripe for innovation. However, to shippers, rail operators, and the broader logistics industry, inefficiencies in rail transportation have long been a substantial pain point (both logistically and financially), which hinder the overall performance of a critically important transport sector.
For one, there are staffing and crew shortages; per the U.S. Department of Transportation, staffing and crew shortages have struggled to return to pre-pandemic levels, which can impact service speed and reliability. Second, the average age of the U.S. freight rail infrastructure is over 40 years old. According to surveys done by the American Society of Civil Engineers, 20% of existing rail infrastructure is considered to be in “poor” condition. And lastly, over 1 million railcars can sit idle on any given day in the U.S. Whether they are waiting to be loaded/unloaded, are subject to inefficient scheduling due to staffing issues, or are the victim of operational delays in either railway infrastructure or the cars themselves, a million railcars sitting idle represent a large capacity of the country’s total freight car fleet.
These inefficiencies often lead to significant economic losses, bottlenecks in the supply chain that cause delays, and a substantial carbon footprint. In addition to inefficiencies in the existing freight system and ever-growing carbon footprint, safety issues are of considerable concern, with numerous high-profile safety incidents occurring over the past several years.
Intramotev recognized these critical gaps in efficiency, sustainability and safety, and the subsequent opportunity to change this for the better. Intramotev’s solution stack allows rail customers to retrofit existing trains with their cutting-edge technology, which includes industry-leading software, high-tech sensors for superior safety, and various interfaces to ensure compatibility and interoperability.
Why retrofit? Instead of incurring the capital expenditure of ground-up development of a new railcar, retrofits allow Intramotev to maintain competitive pricing power while still delivering tremendous value to the end-user/customer. Intramotev aims to tackle the idle railcar problem with a conviction in autonomous and electric rail: by placing motive power directly into the railcar instead of relying on locomotives, Intramotev allows freight to move itself from point-to-point autonomously and without the use of fossil fuels.
Two key products are being offered by Intramotev currently: the TugVolt, an autonomous battery-electric railcar capable of operating without a locomotive or driver, and the ReVolt, an electric railcar designed to be pulled by a locomotive. By integrating these electric railcars into long trains, Intramotev is helping rail companies replace diesel-powered locomotives, significantly reducing diesel consumption and lowering emissions, ultimately contributing to a more sustainable and efficient rail system. Further, the low-maintenance requirements of electrified components reduces the likelihood of breakdowns or delays due to maintenance, therefore enhancing the robustness of the rail network.
From the onset and throughout our diligence, we were deeply impressed by Tim and his team for a number of reasons. For one, we were impressed by the technical talent present at Intramotev, starting with the founding team. Not only did Tim complete a Mechanical Engineering PhD and spend six years working on cutting edge mobility tech at Boeing, he’s also an incredible storyteller. Alex is a U.S. Air Force veteran, where he worked in aviation logistics; he has also worked for a number of Fortune 500 companies in marketing and branding. Corey, similar to Tim, also worked at Boeing where he worked in their materials and physics division. They are committed to their mission, have built an incredible operation in St. Louis with a devoted and highly technical team, and have already shown considerable level of demand for their product, with high-ticket orders in tow.
The Intramotev team possesses an exceptional depth of knowledge about the rail industry and an acute understanding of its specific pain points. They articulated these challenges with clarity and insight, aligning perfectly with our investment thesis of backing strong technical storytellers. We are incredibly excited to support the Intramotev team as they work to transform the rail freight industry, solving a long-standing problem that has persisted for far too long.
