Gisli Gislason, CEO of Northern Lights Energy, takes delivery of the battery-powered ML sport-ute from Amp CEO Jim Taylor.

Indiana-based electric vehicle maker Amp electric has landed a major deal that should be worth about $100 million over the next four year, a significant sum for a battery-car start-up.

Amp will deliver a Mercedes-Benz ML sport-utility vehicle, today, that it has converted to run on battery power.  It will be the first of 20 the conversion company has been contracted to supply to Iceland’s Northern Lights, by mid-year.  Their agreement then calls for production to ramp up to 250 vehicles annually, or 1,000 in total.

While neither company would discuss the specific price per vehicle, Amp CEO Jim Taylor said the Northern Lights contract, which includes various support and training functions, will be worth $100 million.

“This is an ideal relationship,” said Taylor, who previously headed the Hummer and Cadillac divisions for General Motors before joining Amp early this year.

Amp is one of an assortment of small battery-car wannabes looking for a niche in what could eventually become a huge market.  But the challenge is getting going, Taylor said.  There’s a chicken-and-egg problem in that it takes money to develop products, but those with the capital first want to see firm orders.  The deal with Northern Lights could turn things on for the Indiana firm.

Northern Lights, in turn, believes it can capitalize on a desire by Iceland to wean itself off petroleum.  Earlier in the millennium, the focus was on hydrogen power, Icelandic leaders negotiating deals with the former DaimlerChrysler, Shell and others to set up a field test of fuel cell-powered vehicles.  But hydrogen has lost much of its allure and the auto industry has shifted to battery power.

That works just as well for the island nation, which has so much hydro and geothermal energy sources, “they’re throwing power away,” Taylor told TheDetroitBureau.com.

“We have fifty Icelandic companies and government offices, including the Ministry of the Environment, signed up to host electric vehicle charging and to convert their fleets to 100% electric vehicles and their expectations are high,” said Gisli Gislason, Chairman and CEO of Northern Lights Energy.  “In my opinion, this AMP EV will meet and exceed all expectations.”

The Mercedes ML Amp is providing Northern Lights started out as a conventional, gas-powered SUV.  The start-up stripped out the stock drivetrain, replacing it with a customized electric powertrain using lithium-ion batteries.

Amp uses an unusual two-motor design, rather than the single-motor drivetrain developed by other battery-car makers, large and small, including Nissan, with the Leaf, Chevrolet, with its Volt, and Tesla, for the Roadster and upcoming Model S.

But Amp doesn’t provide its own vehicle, instead installing its driveline in more mainstream products.  It previously worked with a variety of other vehicles, including a Chevrolet Equinox (Click Here for TheDetroitBueau.com’s review of the Amp Equinox.) But Taylor said there are advantages to going with a high-line model like the Mercedes ML.

“Let’s face it, electric vehicles aren’t cheap,” he explained. “I wanted to use a premium vehicle that people were willing to pay for.”

Further improving the economic appeal, Iceland has agreed to drop the country’s normally hefty tariff on imported battery-electric vehicles.

The new deal will initially focus on Iceland, but Northern Lights eventually plans to expand to other Nordic countries, such as Finland, Sweden and Norway.