Jumping the Gun: Big Hopes for V-Vehicle as Financing Deadline Looms

A March 1 deadline looms for V-Vehicle to raise $350 million — the amount that the T. Boone Pickens and Kleiner Perkins-backed startup needs in order to release the bulk of an incentive package put together by state and local authorities in Monroe, Louisiana (or else request an extension). And so there’s growing pressure on the 4-year-old company and its backers to show progress on a project that’s supposed to create more than 1,400 jobs, but has publicly revealed little more than a headlight and a factory site.

But this week Stephen Moret, the economic development chief for Louisiana has relayed to local media a couple of milestones: He expects a green light from the Department of Energy on V-Vehicle’s loan request within two weeks, and he says V-Vehicle is approaching the end of an often lengthy environmental assessment process.

V-Vehicle, along with dozens of other companies, is competing for a shrinking pile of funds in the DOE’s Advanced Technology Vehicles Manufacturing loan program. This latest update comes about a month after V-Vehicle’s director of Louisiana assembly operations, David Hitchcock, told the local Monroe News Star the company had moved on from validation “in a virtual environment” to the “physical testing phase” for what will reportedly be a high-efficiency gas powered vehicle.

“I don’t want to speak for the company or DOE, but what I do know is they are very close to the finish line in DOE’s ATVM process,” Moret told the Ouachita Citizen. “I don’t anticipate the environmental assessment will threaten this timeline for the project.”

The environmental assessment claim this week raised a flag for us, since the process reportedly only began last month. DOE spokesperson Ebony Meeks told us today that while the agency can’t comment on individual applications, the average review time for environmental assessments is 6-9 months.

Perhaps more importantly, at least for V-Vehicle’s chances of making it under that March 1 deadline, the environmental assessment doesn’t actually have to be finished in order for the DOE to give the nod on a loan. Meeks acknowledged in an email, “It is possible for an applicant to receive a conditional commitment from the Department prior to a NEPA [National Environmental Policy Act] review being completed.”

Tesla Motors offers an example of that — the San Carlos, Calif.-based electric car startup has been able to close its loan agreement with the DOE before settling on a project site. Once the company selects a site, it will go through the NEPA review process to ensure it meets environmental regulations.

At a certain point in the application process for federal funds, companies and regions hoping for funds to build out next-gen vehicle factories and other projects, and in the process create some green jobs, have one main thing to do: wait. That’s where V-Vehicle is now, and whatever milestones it has been able to hit so far, it’s still far too early to tell whether the company will be able to deliver on its promises to build “a new American car company.”