One of the last pieces that could deliver V-Vehicle — the secretive San Diego startup that’s aiming to build a highly efficient car in Louisiana — some hefty manufacturing incentives has just fallen into place. The Louisiana State Bond Commission gave the green light Thursday for Ouachita Parish (where V-Vehicle has begun preliminary work upgrading a factory) to issue $11.55 million in bonds to fund its share of V-Vehicle’s incentive package, The News Star reports.
According to the Bond Commission’s agenda for the meeting, this funding is meant generally to sweeten the deal for a vehicle manufacturer to locate its work in an old plant that once cranked out Guide Corp. headlamps, and more specifically, to help expand the facility.
But while a green light for the $11.55 million in bonds marks a milestone for 4-year-old V-Vehicle (according to The News Star, this week’s commission meeting, “was the last opportunity the parish had to get the bond issuance approved,” before a March 15 deadline to have the local incentive package in place), V-Vehicle is hardly in the clear to finance its ambitious project.
The company, which was founded by former Oracle exec Frank Varasano, now has 10 days — just a week from Monday — to show state and local officials that it has $350 million in debt and equity financing. Raising that amount by the March 1 deadline (unless V-Vehicle gets an extension) is supposed to release most of the incentives put together by state and local authorities.
V-Vehicle has requested $320 million from the Department of Energy’s Advanced Technology Vehicles Manufacturing loan program to meet most of its share, including $250 million for manufacturing and $70 million for engineering.
Raising funds for manufacturing and commercialization has been a sticking point for other green car startups. We’ll have to wait and see how V-Vehicle’s DOE request pans out. But in a range of possible scenarios — from flat-out rejection to partial funding to approval of the whole $320 million in loans — V-Vehicle may need to turn to private investors again in coming months to deliver on its promise to build “new American car company.”
When the startup came out of stealth mode this summer, the Louisiana Economic Development Corp. named Texas energy baron T. Boone Pickens and Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers as investors, and reports came out a couple months later (after Google’s senior vice president for corporate development and chief legal officer appeared on a V-Vehicle regulatory filing) that Google Ventures had also backed the company.
V-Vehicle keeps mum on just about everything, including its technology, design, phase of development, financing and commercialization plan, but it has reportedly lined up at least $100 million in private funding so far. So information about the company that has become public mainly has to do with its web of well-connected backers, and its arrangements with Louisiana and the local governments. That may help grease the wheels at the DOE, but with dozens of other companies vying for the low interest loans, it should be those under the radar details that make or break its bid for funding meant to jump-start advanced vehicles.