What the ARPA-E Bets Mean for the Future of Green Cars


doe-logoOf the $151 million in grants announced this week under ARPA-E (Advanced Research Projects Agency-Energy), the Department of Energy’s highly competitive program for high-risk, early-stage energy technologies, more than a fifth — some $33 million — has been allocated for green vehicle projects. Since the program is meant to support work on tech that other investors consider too risky, each of the projects — from boosting the fuel economy of gas-powered cars to replacing lithium-ion batteries as the technology of choice for electric vehicles — represent something of a gamble. So when it comes to choosing ideas for transforming the auto industry and cleaning up transportation, how wisely is the DOE placing its chips?

According to Lux Research analyst Jacob Grose, who headed up the firm’s recent report on electric vehicle adoption, this first round of funding (there’s nearly $250 million left in the pot for later rounds) offers support for a strong balance of innovations. “Overall, I think the ARPA-E guys hit all the key areas for vehicle technologies,” by investing in the motors, batteries and electronics for today’s electric vehicles, as well as “some future technologies which are higher risk but may play a role in novel vehicles down the road,” and others that could help boost the MPGs of cars with the ol’ internal combustion engine.

J.D. Power and Associates analyst Michael Omotoso agreed, noting that ARPA-E fits into a larger portfolio of federal programs supporting advanced vehicle and battery manufacturing, “so most of the bases have been covered.” But at the individual project level, not every award is a clear home run for ARPA-E’s mission “to develop nimble, creative and inventive approaches to transform the global energy landscape while advancing America’s technology leadership.” And of course, not every tech with potential to aid that transformation made it into this first round.

While universities, smaller businesses and startups account for the bulk of awards related to vehicle technology, two legacy players in the auto industry — General Motors (s GM) and Delphi Automotive Systems — are taking home a total of more than $9.4 million for projects that, according to Grose, are both “a bit strange.” Delphi’s project (awarded $6.7 million) involves gallium nitride electronics, which Grose said are more efficient than the silicon-based devices currently available, but don’t perform at as high a level as a third technology (silicon carbide) that other companies are working on. So considering the goals of ARPA-E, it’s “a bit of a conservative choice, technology-wise,” he said.

GM’s project, which involves memory-shape alloy technology for capturing waste heat from car engines, by contrast, struck Grose as “very speculative, especially when compared to thermoelectric solutions that companies like Amerigon are working on.”

GM won a smaller grant than Delphi — just $2.7 million. But Grose questioned the wisdom of the awards for the two projects. He said, “I think most of the other investments are more on target from a risk/benefit point of view.”

How much of a difference can a grant of a few million dollars really make for companies of this size? According to Grose, while the awards for GM and Delphi “will not at all move the needle for these companies, they will certainly allow these longer-term research projects to continue at a faster pace than they otherwise would, since cash-strapped companies rarely have the resources to invest in more speculative R&D.”

For a smaller, venture-backed company like Envia Systems — which raised $3.2 million in Series A financing last year — the ARPA-E funds can help build out a new business. Envia co-founder and director Michael Sinkula told me in an interview Tuesday that the 2-year-old company’s $4 million award will help it “pursue technology that we were not really focused on.” So far, Envia has dedicated its resources to developing cathode materials, but with the ARPA-E grant it will venture into anode technology.

ARPA-E has also reached into fuel cells. The University of California at Riverside won funding for work on alkaline polymer electrolyte fuel cell membranes, which the ARPA-E announcement says has the “potential to drastically reduce fuel cell costs and enable their widespread application in building and automotive applications.” It’s the smallest grant of yesterday’s bunch, at $760,705, and the only vehicle-related project clocking in at less than $2 million. Good thing, suggested Ron Gremban, technical lead for the nonprofit California Cars Initiative (CalCars.org), since it’s only “one of the seven or nine simultaneous breakthroughs necessary to make hydrogen vehicles practical and effective.”

As for the remaining millions, for future ARPA-E rounds, Omotoso sees plenty of areas of green car innovation that could use some more research and funding, notably: electrical grid optimization, electric motor technology, light-weight materials for vehicles and components, and finding “the best type of electric motor for an EV or a PHEV.” Gremban, meanwhile, said he would like to see “funds go to small, innovative projects” for plug-in conversion startups. Andy Frank, a staunch advocate of plug-in hybrid vehicles and an engineering professor at the University of California, Davis, echoed that point. “I think the DOE has missed the boat in this round,” he said, by failing to support lower-hanging fruit, such as conversions of conventional vehicles to plug-in hybrid or all-electric, that could accelerate “the transition from oil to electricity.”

For some of this tech, maybe the private sector will beat Uncle Sam to the punch. ARPA-E, after all, is “explicitly for long-term home runs,” rather than near-term solutions, as CalCars.org founder Felix Kramer put it. But starting now, there’s a new investor in town with high risk tolerance. If this week’s awards send one message to the venture capital community, said Grose, it’s this: “ARPA-E knows what they are doing, and will be akin to a well-run government VC fund.”



replacement studies abound for a horseshoe replacement, meanwhile the kings battle steed needs a few horshoe nails or the kingdom is gonna be lost!

Its nice to think long range. But does America ever settle for a middle range? We have in the left corner, the current fiscal quarter. In the challenger corner we have “perhaps manyana, or the day after, but definately not in the forseeable future.”

Is there a “contender” in the house ‘right now, today, for’ us?

On the other hand, lightly, this DARPA et all energy issue has me wondering if someday I could have a green nuclear fueled car (sizewize its already a plausable unit) and when someone stole it from the parking space, I could sic the feds, the DOE and DOD even on them instead of the local constbulatory. Just a dream….

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