Aug 7, 2009 (From the CalCars-News archive)
Wednesdsay we posted news and specifics about the federal grant awards for the battery development for plug-in vehicles. We mistakenly said that these awards covered only the battery and related component industries. A more careful reading shows it in fact does include the DE-FOA-0000028 Transportation Electrification program. And now we have more to say -- much of it critical -- while we hope for an improved sequel.
As our partners, supporters and readers of CalCars-News know, we've been energetic fans of the DOE's new initiatives since they were announced. We promoted their availability broadly, pointed people to resources, advised people with questions, and brokered matches for a program whose theme was partnerships. We wrote letters of endorsement for applications by other organizations and companies. CalCars did not itself directly apply for a grant, but we were included as subawardees in several applications. That gave us a direct interest in how funds were allocated.
In recent years, many small companies and organizations decided not to bother jumping through the many hoops for federal programs,. They cited time-consuming application and reporting forms. And they felt the playing field was not level: that small and independent players stood little chance against the well-connected big players on the inside track.
This year, with Transparency and Accountability the stated principles for the recovery program, it looked like a brand-new story. The word went out broadly to companies and to the advocacy coalition that helped get us to the point when commercialization of plug-in vehicles is in view (more on that at end of message). Entrepreneurs and organizations participated enthusiastically and eagerly awaited the outcome.
The results have been mixed -- while important and valuable projects were funded, we and others (see media quotes after our comments) have pointed out skews and notable omissions in the awards, and a "business as usual" cast of characters.
In our posting, focused on the funds from the $2B first federal program for on battery, infrastructure and deployment, we noted that the bulk of the awards went to large established companies -- especially automakers and component suppliers. We have since heard from a number of smaller battery and automotive companies that feel their constituency was overlooked. One made the comparison to funding dinosaur land-line companies at the birth of the cellphone age.
We now also reluctantly and with disappointment conclude that this characterization applies equally to the sections of the $378M second federal program focused on Vehicle Demonstration & Evaluation and Advanced Vehicle Drive Education.
To take the area with which we are most familiar, education, the solicitation listed as a main goal "Educating consumers on the basics of advanced electric drive vehicles to increase consumer acceptance and market demand." What were the locations in which "the general public?" will be reached for this important objective? The responsibility falls to seven universities: three in Michigan plus four in Colorado, Indiana, Missouri, and West Virginia. "Project locations" are those five states plus Georgia and South Carolina. And for most of these programs, "the general public" is the last in a list of audiences including teachers, students, technicians and emergency responders.
One reason we made our mistaken assumption yesterday was that the institutions that are now and have for years been at the center of the successful campaign to educate car owners and other consumers, public officials and private sector decisionmakers, journalists and industry analysts are entirely missing from the grantees. That includes CalCars and Plug In America, as well as many other energetic organizations like Friends of the Earth, Project Get Ready, regional plug-in coalitions and others listed at http//www.calcars.org/partners.html . (We haven't asked these organizations for permission to list them in this paragraph.) Also missing are utility- and automaker-sponsored outreach and educator efforts.
Today, if we were asked, "are you happy about the results?" we'd say that while we appreciate the many worthwhile awards, we hope the Department of Energy hears from the many innovative companies and both traditional and grass-roots organizations who fell between the cracks. We hold out some hope that DOE will announce a second round in this program from unallocated recovery funds. If so, to convince those potential applicants that they may have better luck next time and it's worth their trouble to apply, objectives and evaluation criteria should better match their potential contributions.
Here are a few media speculations about the winners and losers in these awards:
WALL STREET JOURNAL: VC-Backed Companies Left In The Cold By DOE Battery Grants by Mara Lemos Stein http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200908061602dowjonesdjonline000852
Analysts and investors said the DOE seems to be playing safe it in its selection of 48 companies, picking big names and companies that plan to build plants in Michigan, the home of the ailing U.S. automobile industry... . "We weren't the only ones having the thought that the government was interested in filling the funding gap - it may be that they'll still do it," said Mark Mills, chairman of start-up International Battery Inc., which makes large-format lithium-ion batteries and cells and is building a facility in Allentown, Pa. "When you look at the list, what you see is that the DOE has made a cautious bet in the space by funding battery manufacturing essentially just by big companies." "The DOE has to address whether or not they are concerned that emerging technologies will mature and...whether they think innovation can only come out of big companies," said Mills. "We hope that the DOE decides that there may be follow-on to help entrepreneurs."... . Analysts and investors said the DOE seems to be playing it safe in its selection of 48 companies, picking big names and companies that plan to build plants in Michigan. Only two venture-backed companies made the list, raising the question of whether this money will fill the private funding gap.
MCCLATCHY NEWSPAPERS: 'Red' Kentucky loses out as energy grants go to battlegrounds By Halimah Abdullah http://www.mcclatchydc.com/economy/story/73139.html
Notably absent from the list was a high-profile bid by a consortium of 50 companies to build a new [$600 million] battery plant in Kentucky -- a reliably Republican state that is the nation's third largest producer of autos and whose senior senator is Senate Minority Leader Mitch McConnell. McConnell steadfastly opposed the stimulus legislation that created the car-battery program. Department of Energy officials said applications were judged on merit, not politics, and the Kentucky consortium's founder said many factors played into his group, known as NATTBatt, not getting a grant.
SAN FRANCISCO BUSINESS TIMES: State's battery companies get shafted http://sanfrancisco.bizjournals.com/sanfrancisco/blog/2009/08/states_battery_companies_get_shafted.html Unfortunately for the Bay Area, and California as a whole, battery companies here got zilch. Jeff DePew, CEO of Imara, was worried when I interviewed him a couple weeks ago, that the already-established battery manufacturers -- not those producing the latest and greatest technologies -- would get the money. He said during that interview: "If they (the government) just invest in the ones that are big names and already incumbent, they'll be investing in first generation technology that may or may not be able to withstand the competition that will be coming form Asia. If they invest in more forward companies that have demonstrably better technology and better performance but maybe are not as connected or at the same level of development, I think that's what we need to look for."
TO END WITH SOME GOOD NEWS: on Thursday GM announced its production commitment for what was going to be the Saturn Vue PHEV, now a Buick crossover, in 2011.