The CHP Engine Corporation business model is to operate as a technology licensing company. Since trillions of dollars of engine and product manufacturing facilities already exist throughout the world, and the CHP engine can be built in those facilities, the company has no need to create its own manufacturing capability.
Whether a manufacturer is an engine supplier to product manufacturers, or a manufacturer which produces its own engines for its own products, CHP Engine Corporation would license CHP intellectual property to them. Licensing includes a collaboration on CHP design and development from prototype to production-ready for the licensee's product.
This strategy has the advantage of marketplace entry with multiple manufacturers in a wide range of products such as trucks, motorcycles, power generators, and pumps. It also allows rapid entry into specialty markets such as forestry, farming, mining, and construction.
In respect to financial competitiveness, the CHP engine is generally less expensive to produce. By example, one German manufacturer determined that a CHP engine would be 40% less expensive to produce than their conventional engine.
Manufacturers are free to establish their own price for the CHP engine option, and with a lower manufacturing cost, are generally guided by three alternatives 1) price the same as a conventional engine in order to increase profit margins, or 2) use the same “cost plus” formula as their existing engines in order to accelerate CHP sales, or 3) increase CHP pricing higher than conventional engines due to the cost savings a consumer will realize over the life of the CHP engine based on using less fuel, less maintenance and having a longer service life.
With CHP engines positioned as an “engine option” for existing products, and minimal change to any product using the CHP engine, the strategy is to achieve rapid and seamless adoption.
CHP engines is a private company headquartered in Vancouver, Canada. Initial prototyping and product development was performed at the National Research Council laboratories on the University of British Columbia campus.
CHP engine intellectual property is protected by Patents issued and pending.