UPDATE: See below
V-Vehicle Company -- the startup automaker backed in part by oil baron-turned-wind baron-turned-CNG baron T. Boone Pickens -- has dipped a few more toes in the deadpool. According to reports, V-Vehicle has not only lost its founder and CEO, Frank Varasano, but the company has also canceled its lease on a site outside Monroe, Louisiana where it planned to build a new manufacturing facility.
This is the latest in a string of bad news for V-Vehicle, which has been working since 2006 to accumulate the necessary capital to launch a line of new-tech vehicles. A couple of weeks ago, we learned that the Department of Energy had declined V-Vehicle's $320 million application to the Advanced Technology Vehicle Manufacturing Loan Program. That rejection had a domino effect, causing the State of Louisiana to withdraw its offer of $87 million in cash and other incentives. So, instead of ending the day with upwards of $450 million in the bank, V-Vehicle was left with only the $86.5 million it had raised from private investors like Mr. Pickens.
The media loves laughing at start-ups -- especially brash ones like V-Vehicle, which has released very little information about its lineup of combustion-engined vehicles, other than to say that their fuel economy will "dramatically exceed any electric vehicles or any hybrid vehicles". But ridicule is the easy road, and we're not ready to take it just yet. Besides, there may be room for hope in V-Vehicle's future.
Reports indicate that Varasano was fired from his CEO position, which could be read as a positive development. It shows that investors haven't given up on the company, and they want to replace Varasano with someone better equipped to raise money and to put V-Vehicle on the right track. Had Varasano resigned, on the other hand, that would imply that the situation was so hopeless that even V-Vehicle's founder -- the man whose dreams and determination helped build the company -- didn't see a way out.
Also on the positive side, although V-Vehicle may have canceled the current lease on its future plant site, the company plans to renegotiate, taking into account the longer time-horizon necessary to finance and build the plant. What's more V-Vehicle is working on a second application to the DOE's ATVM low-interest loan program -- one that will hopefully address some of the concerns that the DOE cited in its rejection. And finally, according to reports, the company began testing a prototype in February that claims to earn 40mpg and could launch with a sticker price of around $10,000.
To be fair, we're not holding our breath on this project. In its rejection letter, the DOE cited concerns with V-Vehicle's financial viability, and given the company's precariously wobbly state right now, they might've been onto something. Still, we love rooting for an underdog, so we're not giving up just yet. We'll keep you posted.
UPDATE: April 6, 2010 -- "The new head of V-Vehicle Co. says the company will be going back to the federal Energy Department in a quest for $321.1 million in loans."
Teaser for Louisiana's new VVC plant