Updated: While General Motors has backed biofuel makers in the past, this morning the recently launched venture capital arm of the auto giant made its first official investment: plug-in vehicle startup Bright Automotive. Bright is a spinoff from the not-for-profit think tank and consulting firm Rocky Mountain Institute, and has been developing a plug-in hybrid car called the IDEA that will target commercial fleets.
The size of the investment wasn’t disclosed but the companies say that they signed a “memorandum of understanding in July,” that GM funded Bright “this week,” that GM will have a minority stake after the deal is closed, and that more formal agreements will be hashed out later this year. All of that sounds like the deal is still a work in progress. As important as the investment the companies also say that Bright will be able to tap into GM’s auto tech for its vehicles. Updated: GM said on a call with reporters that it has invested $5 million into Bright.
GM announced back in June that it had created a new subsidiary called General Motors Ventures, LLC that was funded with $100 million and would identify, develop and invest in innovative technologies in the transportation sector. Jon Lauckner, a top executive in the development of the plug-in Chevy Volt, has been leading the VC arm (also one of our Top 15 Connected Car Influencers) and said in the release this morning that funding early stage startups is “a new way of doing business at GM to accelerate the introduction of innovative technology to support our core automotive business and give us a competitive advantage.”
Update: Bright Automotive was is actually run by the former chief of General Motors’ EV-1 project, John Waters, (who has now moved into the role of Vice Chairman) and the GM funding is the first high profile equity backer for the two and half year old company. Bright has also been angling for a $450 million loan from the Department of Energy’s $25 billion Advanced Technology Vehicles Manufacturing loan program, and says in its release this morning that it is still seeking DOE funding from that program.
Bright needed these GM funds and likely needs to raise a whole lot more to meet its aggressive production goals. Bright already pushed back its plans to start production of the IDEA to 2013 from its plan last summer to start producing its fleet vehicles in the fourth quarter of 2012. Bright says in the release this morning that the funding from GM “will allow Bright to begin ramping-up the development of the production program for the IDEA in the third quarter of 2010.”
We wouldn’t be surprised if moving production solidly into the middle, or even the end, of 2013 was also ambitious for Bright. If the history of the alternative car startup industry is a guide, these companies (Tesla, Aptera) very commonly have to delay manufacturing and launches because of lack of financing. Many just don’t expect producing a plug-in car to be that expensive.
Bright’s IDEA is different from Tesla and Aptera’s car production plans because it is specifically targeting commercial fleet owners. The startup has very small pilot deals with the U.S. Postal Service, and the U.S. Army to test plug-in hybrid vehicle tech in non-combat situations. Bright says the IDEA can drive in electric mode for 40 miles before it switches into hybrid mode.
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