It’s a new day for V-Vehicle, an auto startup with ambitions to produce low-cost efficient cars. Backed by Google Ventures, T. Boone Pickens and the venture capitalists at Kleiner Perkins, the company has undergone a shakeup since the Department of Energy rejected its high-profile bid for $321.1 million in loans early this year. V-Vehicle has just taken two steps common among ventures whose investors are unhappy and pushing for a restart: The company gave itself a new name — Next Autoworks Co. — and appointed a new chief executive.
Kathleen Ligocki, who has spent much of her career as an auto executive leading turnarounds and restructuring (notably at GS Motors and Tower Automotive), took the reins as CEO this week from investor and Board Chairman Ray Lane. Lane, a Kleiner Perkins managing partner, has been serving as interim CEO since founder Frank Varasano (one of our 25 Who Ditched Infotech for Greentech) exited in April, shortly after the DOE loan rejection. According to the Monroe News Star, which has followed Next Autoworks closely as a potential economic jump-starter for northeastern Louisiana and a recipient of local government support, Varasano was “fired” by the board.
Ligocki told us today in an interview — one of her first as CEO of Next Autoworks — that she is most interested in automotive startups and turnarounds, or as she put it, “creating or recreating something.” She believes her work at 4-year-old Next Autoworks will fall into the first category. It’s more about fleshing out and refining the company’s business than restructuring it, she said.
An outline of Next Autoworks’ strategy and goals has emerged gradually since the company launched out of stealth mode last year. The idea is to build a low-cost, gas-powered, four-passenger car with higher-than-average fuel efficiency and a plastic shell. Company officials told the News Star in April that options will be available for buyers to get personalized graphics and logos applied to the car after it leaves the factory. Ligocki told us today that Next Autoworks aims to sell the “lowest-cost PZEV,” or partial zero-emissions vehicle (a designation under California air regulations), on the market.
To help finance this project, the company requested funds back in March 2009 under the Department of Energy’s Advanced Technology Vehicles Manufacturing (ATVM) loan program, including $79.9 million for engineering integration and $241.2 million to set up manufacturing at a plant in Monroe, Louisiana that once produced headlamps for General Motors. Next Autoworks has submitted a revised application, but Ligocki declined to comment on the status or amount of the loan request.
While Next Autoworks is currently focused on launching its first model in 2012 or 2013, Ligocki hinted at a vision for additional vehicles down the road. The name “Next Autoworks,” she said, “will work for the company as it moves forward long term, not just for this model.” Asked whether the startup hopes to generate revenue from the sale of other products or services (akin to Tesla Motors’ plan to supply powertrains and technology to other automakers), Ligocki said Next Autoworks is taking a different approach and really focused on building and selling practical, affordable cars using off-the-shelf and recyclable parts.
At this point, Ligocki noted, Next Autoworks is refining the design for its inaugural model. The company must “think through sales and distribution,” and complete its plan for manufacturing, supply and marketing. In April, Lane told the Baton Rouge Advocate that the startup would reveal a plan for retail distribution within 1-2 months. Such a plan has yet to be disclosed, however, and Ligocki said she’ll be meeting with potential dealers during the next couple of weeks.
Next Autoworks has established a “highly collaborative” relationship with suppliers, looping them into the development process in a way that allows them to “comment on the direction for the whole vehicle,” not just their particular components, said Ligocki. The company, which now has 35 employees, plans to take a similar approach with dealers.
This is one of the areas where the Energy Department found Next Autoworks’ initial loan application lacking, according to reports from the News Star. In addition to plans for a distribution network, the agency also wanted to see more private capital put in place. Since its founding in 2006, Next Autoworks has reportedly raised between $90 million and $100 million from private investors, and it has described plans in recent months to add $100 million in private capital and credit. According to Ligocki, she’s now getting in-depth reviews of the company’s technology, manufacturing, and funding. From there, she said, it’s a “race to launch.”
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