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Summary:

The DOE has joined the small group of supporters — led by T. Boone Pickens and Honda — of the natural gas car. DOE Secretary Steven Chu announced a $50 million loan for The Vehicle Production Group, which will use the funds to make a 6-passenger natural gas car.

MV-1-1

The Department of Energy has joined the small group of supporters — led by the likes of T. Boone Pickens and Honda — of the natural gas car. On Monday afternoon, DOE Secretary Steven Chu announced a $50 million conditional loan commitment for a startup called The Vehicle Production Group (VPG), which will use the funds to make a six-passenger, wheel chair-accessible car that has a natural gas fueling option, called the MV-1.

There’s been little federal government support of natural gas vehicles to date, given electric vehicles, hybrids and biofuel-powered cars have gotten more attention from the auto industry, entrepreneurs and investors. Despite the insistence (and funding) from oil baron turned green power investor T. Boone Pickens. But some states, local governments and companies (like AT&T) have turned to natural gas cars for fleets.

Four-year-old VPG says its MV-1 car is the only vehicle that has a factory built-in natural gas fueling option. In contrast, most of the small amount of natural gas cars on the roads are conversions. But as BAF Technologies President John Bacon told us last year, converting a car to natural gas can cost around $10,000. Not cheap.

That’s why large fleet orders are key to making natural gas vehicle conversions make economic sense not only for high mileage customers — who can reap savings on fuel — but also for the conversion provider. Consumer natural gas cars, on the other hand, have gone nowhere to date because the economics just don’t make sense. At the L.A. Auto Show last week, I spotted Honda’s natural gas-powered sedan, along with the Phill home charger, but very few of these are currently being used by consumers.

VPG says on its website that final pricing of the MV-1 hasn’t been announced, but the base model is expected to come in under $40,000. The DOE says in its release on the loan that VPG will produce around 22,650 vehicles per year at the Mishawaka, Ind. AM General Plant, and the project will create more than 900 jobs.

The loan will come out of the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, a coveted program which has doled out money to Tesla, Fisker Automotive, Nissan and Ford.

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  1. Natural gas and propane.WE HAVE IT LETS USE IT NOW! Put natural pumps stations at your homes, Honda has this in the work now. stop sending your money over seas. Save the USA

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