TOROTRAK REVVING UP

I think you can discount the idea of battery powered electric cars, due to the weiht of the batteries. 100 new neuclear rectors per week, when not one (to my knowledge) has ever been successfully decomissioned, is out. Covering 25% of the USA with solar panels, (which are usually a net consumer of power rather than generator, due to needing temperatures of 1400 degrees at manuacture) is also out, since there isn't enough silver in the world to manufacture them. Green solutions like wind, wave, etc are okay but in limited quantities. Cold fusion reactors could be available in 50 years if they started making a huge investment now. They won't and it would be too late even if they did. So that only really leaves fossil fuels to generate the electricity and considering power generation and transmission losses, you may as well burn the fossil fuels in the car.

Hybrid technology still uses the internal combustion engine and has need for efficient transmissions.

Alternative technology. Use of the public transport system is far more efficient. This will be forced on us as petrol supplies go east. China will become the world's second biggest economy when it overtakes Japan shortly. And then the US? Volkswagen already sells more cars in China than the US. Hyrocarbon production is set to decline. The past 100 years has used more than half of the supplies built up over 550 million years.

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In short Torotrak is looking good on the points raised above. Katy's argument is more valid: if they are going do spend £3 million in a half year until 2007 then they should raise cash at 20p per share and not wait until the shares are lower. If they expect production before 2007, they should tell us. If they really expect production to take that long, they should justify their spending or curtail it.

If I ran the company and the management story they are telling us is true, I would consider closing down some development, and leave it to the tier-1s, use upto half the cash to buy back shares and the rest for the company to live off. The shares would be prevented from dropping further, and the returns for shareholders would be increased. The only reason for Torotrak to continue development is if the existing product does not work satifactorily, or they are developing another product which will be equally (or more) successfull.

If you knew IVT inside out, would you spend your cash tomorrow working on IVT, or buying Torotrak shares?