Green tech: Breakthroughs, breakdowns
Dave Guilford is enterprise editor of Automotive News.
Two recent events vividly illustrate the highs and lows that await investors in green automotive technology.
Interestingly, both involve General Motors' tech fund, GM Ventures.
-- The upside: Startup battery maker Envia Systems claimed a breakthrough last month, saying it can seriously boost the energy density of lithium ion batteries. The Newark, Calif., company says it will be able to cut by half the cost of a battery pack for a 300-mile range EV. GM Ventures invested $7 million in Envia in January 2011.
An EV battery pack at half today's prices still would be pretty expensive. But it would mark a significant step toward getting EV and plug-in hybrid prices nearer to mainstream consumers' comfort zone.
If this technology proves out, it will be a coup for GM.
-- The downside: Bright Automotive, an Anderson, Ind., startup that planned to make EV delivery vans for business fleets, closed shop.
Although the company got a $5 million investment from GM Ventures, it never accumulated enough capital to begin production. The main problem was failure to get a U.S. Department of Energy Advanced Technology Vehicles Manufacturing loan.
In a letter to Energy Secretary Steven Chu, posted on The Detroit News Web site, Bright executives complained of "outlandish" loan terms and said they had been in due diligence for more than 1,175 days. Sounds like Bright's fate was out of GM's control. Still, score this a setback.
Taken together, the fates of Envia and Bright give a clear view of automotive green tech investment: high potential reward but daunting risk.
A123 Systems of Waltham, Mass., will supply complete lithium ion battery packs to Indian automaker Tata Motors for hybrid systems for commercial vehicles. The companies said the first use will be on city transit buses during the second half of this year. A123 systems will include battery management electronics.
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