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Top-Secret Strategy Behind the new Pontoon Boat

Top-Secret Strategy Behind the new Pontoon Boat

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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11 thoughts on “Top-Secret Strategy Behind the new Pontoon Boat”

  1. I encourage you all to push beyond your limits and take this project as far as it can go in the next 10 months. This first mass market product will be the poster child for the future of the brand as well as for EV boating for the masses.

    I’m all in! I preordered as fast as I saw the email. I’m running a boat past down from my father that was purchased in 1988. It still has the original motor, a Johnson V6 150hp GT. It’s a 2 stroke engine that is very loud a uses oil mixed with gas. The boat is a ranger bass boat. We started using it 2 years ago during the pandemic and fell in love with the lake as a family. We’ve rented pontoons and found it offers the space we need to enjoy ourselves on the lake. It’s time to upgrade to a bigger and cleaner boat.

    From the images I’ve seen I’m hoping your going to offer customization of the deck layout to allow for the boats to fit the needs of the customers. With the electric battery the types of accessories are wide open. Fridges, tv’s, induction cooktops, air pumps and blenders!

    I can’t wait to see all the exciting progress as you share with us this year.

    Any opportunities for in person demos or viewings this year. Like boat show appearances or tours?

    Reply
    • Great to hear from you, Hal. Your story of falling in love with the lake during the pandemic makes me think the current boom signals a long-term shift in what people want to do with their free time.

      We want to offer the amenities people want, without overloading the boat. We certainly don’t want you to get stuck with one of these on a quiet electric boat. More details on options to come.

      Reply
  2. When will your motors be available for purchase in Canada? Are you intending to set up dealerships in the future to facilitate local repairs ?

    Reply
    • They’re available for pre-order in Canada now. We’ll have our own field techs equipped to install and repair systems in markets where there are enough customers to justify it (get your friends to buy one, too!). In other areas, we’ll either do advance replacement for repairs (our outboard can be shipped via common carrier), or train a local service provider to repair them. But the first step for us has always been to design it for easy installation, no maintenance, and minimal repairs.

      Reply
  3. Andy,

    I assume the PW/GM pontoon boat uses the GM Ultium battery. Based on specs of the GM Ultium battery, a 64Kwh pack weighs approximately 519 lbs. Your marketing material lists payload of the pontoon boat as 1300 lbs. What is the dry weight of the boat (e.g. boat hull, decking, single motor and 64Kwh pack)?

    –Roy

    Reply
    • Roy –

      We have no specs to provide now that aren’t listed on the product page. (Note that we state the battery pack will provide up to 66 kWh.) We’ll provide detailed specs on our web site when available.

      Thanks,

      Andy

      Reply
  4. I was curious with a dual motor setup could you set the motors to spin in opposite directions and perform a 360 degree maneuver for tight docking situations?

    That could be a nifty feature.

    Reply
  5. Andy,

    Is there a good reason the company won’t answer phones, return emails or return voicemails?

    How does one get in contact with customer service or sales?

    Thanks.

    Reply
  6. Andy,

    I spoke with Ed yesterday. I appreciate the customer support and would like to praise Ed for what he does. He’s a good man.

    Are you familiar with Munro and Associates? Sandy Munro. There might be an opportunity for a collaboration. His team has some tremendous talent for engineering. And his experience spans many decades.

    They just did a plaid model s motor tear down showing how Tesla is constantly engineering amazing products. Please check him out. Only good things can come out of it.

    Thanks and keep up the good work!

    Reply

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