[ausev] some thoughts from CalCars on the funds missing smaller companies...

[Marc Kohler]

Wednesday 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 cell phone 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 decision makers, 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=200908061602
dowjonesdjonline000852

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.



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