cropped-PW_logo_w.pngTop-Secret Strategy Behind the new Pontoon Boatcropped-PW_logo_w.pngcropped-PW_logo_w.png
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Published by Andy Rebele on January 21, 2022

In November 2021, we announced a strategic relationship with General Motors to work together to make electric boats. On January 5, we unveiled a prototype of the first boat to result from that collaboration, the Pure pontoon boat. This project illustrates many of the facets of our strategy, and how it will help us in our mission to enable a new era in boating that’s more enjoyable, accessible, and environmentally friendly than ever before. 

Big Markets

Electric boats won’t solve big problems if they’re only affordable by the few. To build a really cool electric boat to serve as a small number of people’s third or fourth boat would simply be greenwashing. To really make an impact, we have to address the biggest boat markets, in a way that attracts people who would otherwise choose a conventional gas-powered boat. This pontoon boat addresses the #1 segment in the #1 recreational boating market in the world.

Performance through Efficiency

There’s no art in throwing power at the problem of how to move a boat. And it just doesn’t work with electric propulsion. Batteries are heavy, and boat drag is very dependent on speed and weight, so an electric boat that tries to solve the problem with power and achieve reasonable range uses much of the extra power just to move its battery around. If, instead, an electric boat achieves its performance by reducing hull drag, improving the propulsion efficiency of its powertrain (the proportion of power used to move the boat rather than to create heat and turbulence), and using lighter-weight components and materials, then the performance can come at relatively little cost, and the power and range can be optimized.

The Pure Outboard powering this pontoon boat has been developed over the past nine years to achieve the highest propulsion efficiency in its power range on the market. It uses a large, low-RPM propeller, a custom high-efficiency gear set, and a low-diameter motor to take advantage of passive cooling. Instead of conventional aluminum tubes, this boat emulates the functionality of the familiar pontoon boat using a new, highly-efficient lower hull design (which we’ve been developing since 2018) that uses about 20% less power to achieve the same speed.

A side effect of performance through efficiency is that the boat ends up more considerate of others and the environment. It makes less of a wake, and therefore causes less shoreline erosion, and less interference with the other people, flora, and fauna on and around the water. 

Value, and Values

Most people want more for their money. To be the choice of many, our boat must offer better value than the alternatives. The first step is to make the boating experience better than ever before, with simple controls, and quietness that enhances whatever the activity – socializing, fishing, and listening to the sounds of nature. This pontoon boat is designed for quiet and simple operation.

Next, we have to build the product in a way that’s as efficient as the product itself. By collaborating with GM in the way that we did, we get access to economies of scale in EV powertrain component production that the boat industry by itself could never achieve. GM produces about four times as many vehicles per year as the entire world recreational powerboat industry produces boats. GM has committed $35B to the development of EVs – 40% of its market cap. However the auto industry battles turn out, our bet is that GM will drive quality, cost, and performance far in excess of what can be achieved in the boat industry. We’ve also arranged with GM to provide direct assistance in supply chain management and manufacturing – taking advantage of two of GM’s most valuable capabilities. Our pontoon boat will be built with a GM automotive battery pack, using a number of other components that GM will assist us to source, in a factory that GM will assist us to stand up.

A key component of our agreement with GM is that we get access to components at advantageous prices (approximating internal transfer prices). This is how we avoid the dreaded double marginalization problem that causes prices to be inefficiently high on products built from high-margin components. That’s why every other marine powertrain powered by an automotive battery pack is so expensive, while our Pure-GM pontoon boat is priced at about the same level as similar conventional pontoon boats.

Next, we have to deliver the finished product efficiently. We achieve that by selling direct-to-consumer, enabling us to iterate our sales process regularly to reach the right people (primarily digitally) with a message that resonates, and information that helps them make well-informed decisions. It also helps us enlist customers into our army of advocates, and support them as they persuade others to boat in a better way. We build a collaborative relationship with the customer, which is much easier when you stop being adversarial. We don’t have an inflated MSRP and then wheel-and-deal. We provide one great price to every customer, which keeps us allies, and makes the purchase process faster and less stressful. 

The result of these efforts will be a better value chain than any other in electric boating, and an ability to deliver the best price/performance achievable. 

Some have asked why we chose to work with GM, given that for so long, GM was a proponent of internal combustion engine vehicles. I’d respond that by committing 40% of the value of the company to EV development, GM has shown a willingness to let go of the past and embrace a future focused on EVs. Furthermore, we at Pure Watercraft are focused on maximizing our positive impact on the world, which we can only do if we become the leaders in our field. The economics matter, a lot. By taking the leadership position in electric boats, which depends on the value chain advantage we get through GM, we can have some influence over the future direction of the industry, which can enable us to promote the kind of boating that preserves the great outdoors for future generations. 

Platform

The powertrain is about 90% of the intellectual property in a boat. Once we’ve built the powertrain, we can extend it to new boat types quickly. The pontoon boat illustrates this, as we showed a working prototype 44 days after announcing our GM deal. (Note: the prototype uses Pure Watercraft battery packs,in lieu of a GM battery pack. It informs our view of performance because it uses the production-intent outboard motors and hull shape, and can simulate performance with the GM battery pack by adding weight.) Similarly, after we complete the integration of the GM battery pack with the Pure Outboard system, we can release future boats on the same platform with an order of magnitude less work than starting from scratch. This is the power of a platform.

Pre-Orders

The relationship between people and brands is evolving. In the past, it was a one-way street. Brands designed and delivered products, and customers bought them, based on the value they saw in the product as a user. But today, people are voting with their pocketbooks, and they’re more conscious of the impact of their purchasing decisions. 

Pre-orders are another source of efficiency. By collecting pre-orders prior to production, we can develop manufacturing capacity and make supply chain decisions more rationally, so we don’t waste resources on excess capacity or fall dramatically short of demand. We can also secure financing at better terms, which gives us a better cost structure and the ability to deliver more value for a better price. This is where you come in. If you place a pre-order with us today, you enable us to produce more efficiently than we could without you.

 

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Andy Rebele
Andy Rebele

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