Protean Electric is getting its wheel-motor business rolling.

The company signed a deal with FAW-Volkswagen--the German automaker's Chinese partner--to develop a new electric powertrain for an upcoming production car.

FAW-VW will use two Protean in-wheel motors in a new rear-wheel-drive electric car to be based on the Bora compact sedan, a car somewhat similar to the Volkswagen Jetta sedan sold in North America.

Protean's latest in-wheel motor develops 75 kilowatts (100 horsepower), and can recover up to 85 percent of the kinetic energy from braking, the company said on Thursday.

The major advantage of in-wheel motors is packaging. All of the control electronics fit within the motor, which fits inside wheels 18- to 24-inches in diameter. Each motor looks a bit like an old-fashioned drum brake.

In fact, the electric motor is essentially turned inside-out and partitioned into a series of sub-motors, arranged in a circle with individual power electronics.

The main downside to in-wheel motors is "unsprung weight," the much greater mass the car's suspension has to deal with.

Protean believes many of the problems caused by the added weight of an electric motor in a wheel hub can be solved by careful suspension tuning.

Brabus' Technology Project Hybrid, using Protean in-wheel motors.

Brabus' Technology Project Hybrid, using Protean in-wheel motors.

So far, Protean has demonstrated its wheel motors by converting production vehicles into plug-in hybrids, including a Ford F-150 and a Brabus Mercedes-Benz E-Class.

Retrofitting large sedans and pickups is a good way to increase the efficiency of these types of vehicles. Heavy-load and high-performance vehicles will be among the hardest to make efficient enough to meet upcoming fuel-economy standards.

However, the FAW-VW Bora-based rear-wheel drive electric car may be the first production vehicle designed to use Protean's in-wheel motors, as well as their first all-electric application.

Production of the motors is expected to start next year in Liyang, China. In addition to providing a location for a factory, the Chinese city provided some funding to Protean.

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