Bright Automotive withdraws DOE loan request, closes shop
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Electric-vehicle startup Bright Automotive is closing its operations after withdrawing its application for a loan from the U.S. Department of Energy.
Bright, which was formed in 2008 to produce electric vans for sale to corporate fleets, announced Tuesday its plan to withdraw the application, blaming an overly rigorous and lengthy loan-approval process for the decision to close, according to The Wall Street Journal.
Bright, of Anderson, Ind., sought funding from the DOE's $25 billion Advanced Technology Vehicles Manufacturing loan program in December 2008 to build a plant and develop its vehicles.
General Motors invested $5 million in the company in August 2010 in exchange for access to Bright's fuel-efficient vehicle technologies.
Bright had planned to assemble the IDEA plug-in hybrid electric van at a former AM General plant in Indiana and do engineering in Michigan, the Journal reported.
Under review
The company's loan request had been under review for more than three years, according to the New York Times. The company first sought $450 million then cut the request to $314 million, the Times reported.
In a letter to Steven Chu, the secretary of energy, Bright executives said that they were asked to meet more and more difficult requirements and finally the tasks became unacceptable and the company's resources were diminishing, the Journal reported.
"Bright has not been explicitly rejected by the DOE; rather, we have been forced to say 'Uncle,'" Bright said in the letter.
A DOE spokesman said in a statement in response to the letter:
"We understand that this is a difficult day for Bright Automotive and their workers. Over the last three years, the Department has worked with the company to try to negotiate a deal that supported their business while protecting the taxpayers. In the end, we weren't able to come to an agreement on terms that would protect the taxpayers."
Pattern of failure
Bright's story is similar to those of other small automotive companies launched at the height of the green technology hype in the past few years.
Several startups such as Bright have tied their hopes to getting a DOE loan. The loan program, funded in 2008, so far has committed only $9.13 billion of its total $25 billion budget.
California electric vehicle maker Aptera Motors closed in December 2011 after failing to secure private-sector funding to begin production of a midsized electric sedan. Aptera had also applied for a Department of Energy loan.
Indiana startup Carbon Motors Corp. sent a public letter to Obama administration officials in December 2011, pleading for a DOE loan to build clean-diesel police cars.
Startup automaker Next Autoworks Co. closed its San Diego headquarters in December 2011, cut staff and consolidated into its suburban Detroit technical center after failing to secure a $320 million government loan. The company had planned an energy-efficient small car. The Department of Energy denied an earlier loan application from the company in March 2010.
Automotive News staff contributed to this report.
You can reach Ellen Mitchell at emitchell@crain.com.
