“Extremely surprised” and “shocked” are some of the words that secretive green car startup V-Vehicle and local officials in Louisiana have used this week in the wake of V-Vehicle’s failed bid for a federal loan to build a low-cost, high-MPG car. But given what few details we know about the company’s technology and stage of development, should rejection under the Department of Energy’s Advanced Technology Vehicles loan program really come as such a shock? Not if you look at what the loans in this highly competitive program have been designed to accomplish, and at the mix of companies and projects that have won the first five awards (see chart below).
In terms of the DOE loan, V-Vehicle brought to the table a shorter track record than even the earliest-stage awardee (Fisker Automotive). And V-Vehicle’s technology — a gas-powered, highly efficient car — represents a relatively small step away from fossil fuels, compared to the leap that could be possible with the electric vehicle tech that the DOE has supported in legacy player Nissan’s project.
Granted, V-Vehicle provided the DOE evaluation team with a heckuva lot more visibility into its technology and business plans than it has revealed publicly. It’s a respectable choice: Fewer promises made leaves fewer to break. But by any measure, V-Vehicle remains at a very early stage — which can make it difficult to prove financial viability for the term of the loan, one element factored into the ATVM loan decisions.
A short history isn’t necessary a deal breaker. As you’ll see in the chart below, the DOE has given the nod to other venture-backed startups: Tesla Motors and Fisker Automotive. Along with the risk of young ventures with unproven business models, however, Tesla and Fisker represent two of the most widely recognized plug-in vehicle brands. On top of that, Tesla already had a few hundred of its first all-electric model on the road when it applied for ATVM funds — not a lot, but more than any other automaker in the country.
Created under Section 136 of the Energy Independence and Security Act of 2007, the ATVM program holds authority to award up to $25 billion in direct loans. Projects can include re-equipping or expanding existing manufacturing facilities, establishing new plants in the U.S., or dealing with the engineering integration associated with these types of projects.
Under the program rules, ATVM-funded vehicle projects from new companies like V-Vehicle have to deliver fuel economy improvements of at least 25 percent compared to the average for that vehicle class in 2005 (for a manufacturer that already had cars on the market five years ago, its own 2005 fleet average serves as the base). According to the final rulemaking for the program, the DOE considers “the extent to which an advanced technology vehicle exceeds” the minimum 25 percent improvement when it’s “prioritizing projects.”
V-Vehicle has not shown a prototype or concept of any kind in its four years of existence. It has big-name backers, but it’s hardly the symbol for the nascent electric vehicle industry that Tesla and (to a lesser extent) Fisker represent. The company’s basic idea is to bring higher-MPG gas cars within reach for the masses. To do that, V-Vehicle revealed this week that it wants to build a four-seat car with better-than-average fuel efficiency at significantly lower cost than currently available models. Priced 35-40 percent, “below comparably equipped cars,” V-Vehicle CEO Frank Varasano said in a statement, the so-called V Car “would have a greater impact on the environment over the next five years than any electric or hybrid currently on the market or in development today.”
We’ll keep updating this chart as more decisions emerge from the ATVM office. For now, here’s your cheat sheet on winners and losers under the green car loan program.
|Company||Request (Award)||Project (Scale)||Jobs (Locations)||Phase|
|Ford||$11.4B ($5.9B)||Engineer tech for fuel efficient gas cars, convert truck plants to build cars (deploy in nearly 2M cars/year)||35K (IL, KY, MI, MO, OH)||EcoBoost engine tech entered production in 2009 model year. Company has $46B market cap|
|Nissan||($1.6B)||Construct new plant and retool factory to build electric cars and battery packs (150K vehicles/year, 200K batteries/year by March 2015)||1,300 (Smyrna, TN)||Nissan LEAF concept unveiled 2008, followed by multiple prototypes; production version unveiled Aug. 2009. Parent company has $38B market cap.|
|Tesla||$350M ($465M)||Set up two plants, one for electric Model S, one for battery packs and electric drivetrains (30K packs, 20K vehicles in 2013)||1,000 (Southern CA), 650 (SF Bay Area, CA)||Model S concept debuted Mar. 2009. Company had delivered more than 500 Tesla Roadsters at time of ATVM award (Jun. 2009).|
|Fisker||($528.7M)||Engineering and integration work with U.S. suppliers for luxury plug-in hybrid Karma; set up manufacturing for mid-range Nina model (75K-100K Nina vehicles/year by 2012)||5,000 (suppliers throughout U.S., Nina plant in Delaware, Karma production in Finland, engineering initially planned for Pontiac, MI but moved to Irvine, CA)||Fisker Karma shown in prototype; Nina in very early development.|
|Tenneco||($24M)||Design, engineer and produce fuel-efficient emission control components for gas, hybrid and diesel-powered vehicle engines (components slated to go into 2M vehicles in 2010-2014)||1,500 (total workforce at Tenneco’s MI, IN, NE facilities).||Company considered a Tier 1 automotive supplier and has $1.44B market cap.|
|V-Vehicle||$321.1M (Rejected)||Retool old GM plant to build 4-person, gas-powered car with better than national average fuel economy (production goals not disclosed).||1,400 directly (Monroe, LA); 1,800 indirectly (northeastern LA)||Company says “first production prototype” is now “in testing.”|