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Bad news for startup automaker V-Vehicle: the company has missed a crucial funding deadline, and as a result, it will forfeit $87 million in cash and incentives from the state of Louisiana for V-Vehicle's new plant in Monroe. As per an agreement with the state, V-Vehicle needed to demonstrate that it had amassed a minimum of $350 million in capital by March 1, 2010 in order to win the $87 million package, but to date, it has raised significantly less.
When we checked in on V-Vehicle back in January, the company had secured around $90 million in private financing to build gas-powered cars boasting fuel efficiencies that "dramatically exceed any electric vehicles or any hybrid vehicles". The Department of Energy had also begun reviewing V-Vehicle's application for $320 million in low-interest loans from the DOE's Advanced Technology Vehicles Manufacturing program. (That's the same $25 billion program that has already awarded loans to Ford, Nissan, Tesla, and Fisker.) At the time, V-Vehicle spokesman Joe Fisher said, "[W]e feel confident that we will get a positive decision on our application [from the DOE] before March 1."
Not to get all schadenfreude-y on a Monday morning, but it would appear that Fisher's confidence was misplaced, since it's now March 1, and no decision on V-Vehicle's loan application has been announced by the DOE. To be fair, that announcement could still come today -- the DOE doesn't comment on applications until the agency has decided on them -- but we aren't holding our breath. Making things worse, V-Vehicle's other fundraising efforts seem to have plateaued, since the company still has less than $100 million in the kitty. Add that up, carry the one, and it's clear that V-Vehicle doesn't have the necessary $350 million in capital to win support from the state.
So what does this mean? Well, for starters, the company will have to reimburse Louisiana for the money it has already spent on the V-Vehicle project -- a total of $6.2 million that has been put toward improvements at V-Vehicle's factory site in Ouachita Parish. That cash was part of the state's $87 million support package, which Louisiana agreed to release early as a gesture of good faith. Reimbursing that dough will knock V-Vehicle's capital below the $90 million mark.
But all isnt' lost: if V-Vehicle proves successful in its quest for DOE funds, the state can enter into another agreement with the company to send big bucks its way. In fact, Louisiana Department of Economic Development Secretary, Stephen Moret, has said that he will ask the Louisiana legislature to do just that if the DOE gives V-Vehicle a thumbs-up. And frankly, if Louisiana still has $87 million lying around after the governor, the senate, and the house finish wrangling over next year's budget and plugging the state's billion-dollar shortfall, V-Vehicle has a reasonable chance of getting it.