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Correction & Comments on Just-Announced Federal Grants

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  • Felix Kramer
    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
    Message 1 of 1 , Aug 7, 2009
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      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.

      (Shortly after it goes out on email, this posting
      will also be viewable at
      http://www.calcars.org/news-archive.html -- there
      you can add CalCars-News to your RSS feed.)

      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 area 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.

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      http://www.calcars.org
      http://www.calcars.org/news-archive.html
      -- -- -- -- -- -- -- -- -- -- -- --
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