Lessons in Stealth Communications: V-Vehicle Tries to Keep Technology Details Under Wraps

1/20/10Follow @bvbigelow

One problem with being a stealthy company is the difficulty in setting the record straight.

The News-Star of Monroe, LA, reported yesterday that V-Vehicle, the San Diego-based startup automaker building a factory in Northeastern Louisiana, is “apparently testing prototypes of its mystery car,” but that may be overstating the matter.

The newspaper quotes David Hitchcock, V-Vehicle’s director of Louisiana assembly operations, as saying, “Our product has entered the testing and validation stage. A lot of the testing and validation conducted so far has been in a virtual environment, but we’ve moved on to the physical testing phase.”

V-Vehicle has disclosed few details since June, when the startup founded by former Oracle executive Frank Verasano announced plans to a develop and build a “high-quality, environmentally friendly, and fuel-efficient car” in Monroe. The announcement attracted attention in part because V-Vehicle has raised at least $75 million in venture capital from investors that include Kleiner Perkins Caufield & Byers, Google Ventures, and maverick investor T. Boone Pickens.

But as I reported at the time, V-Vehicle provided no details about the car itself, such as what type of fuel it will use or why the startup describes it environmentally friendly. Verasano told reporters V-Vehicle is trying to be protective of many details because of potential competition. I contacted V-Vehicle spokesman Joe Fisher to confirm details of the news report, and we got into the verbal dance (one-two, sidestep, one-two) that often occurs between reporters and their sparring partners in public relations.

The bottom line is that Fisher would not confirm certain details of the Star-News report. For example, when I asked if V-Vehicle is testing multiple prototypes, or just one prototype, Fisher told me, “We haven’t commented yet on prototypes.” He added that “entering the testing and validation stage” does not refer to prototypes. When asked what it does refer to, Fisher said it means the startup has begun engineering on test vehicles. But he declined to define the meaning of a test vehicle, saying, “I’m not sure that we’re going to go beyond” what V-Vehicle has said in its official statements.

I also asked Fisher if he could confirm another detail from the News-Star story, that V-Vehicle’s car will be “a gasoline-powered vehicle that will get 40-plus miles per gallon and costs about $10,000.”

Fisher responded, “We don’t talk about the price of the car or the fuel system. That’s just not something we have commented on.”

Fisher was willing to discuss aspects of its pending application for $320 million in government loans under the Advanced Technology Vehicles Manufacturing program, which is administered by the U.S. Department of Energy. He confirmed that V-Vehicle has asked the DOE for a $70 million loan for engineering and a $250 manufacturing loan.

The state of Louisiana has pledged another $87 million through a state incentive package—providing V-Vehicle raises at least $350 million through other sources. Because V-Vehicle has raised about $75 million from its venture investors, Fisher says the federal loans (if approved) should carry the company over that threshold. Fisher says the company wants to provide more details, but intends to withhold additional information until the DOE acts on V-Vehicle’s federal loan application.

Until then, the only online source of information about V-Vehicle is on the Louisiana Economic Development website.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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  • Glenn Mosier

    Hopefully they were less ambiguous on their application for government loans.

  • Carl Shrag

    (Please re-post this as a community service)
    Less than 20 car companies (The ATVM people say there were tons of applications but only a handful were car companies) applied for $25 BILLION DOLLARS in taxpayer money managed by a certain smug group of people at DOE in order to get loans to make green cars for Americans. This was not all of DOE that did bad things, just a private cadre of men led by Lachland Seward

    There was enough money to help every single one of the car companies that applied. The administrators applied their interpretations of the law in order to benefit the large lobby group-related firms and avoided every one of the “politically unconnected “independent American companies.

    The amount of lobby and influence money spent by each awardee is in direct ratio to the amount of money awarded. Pay-to-play was the process.

    The smaller companies, due to lower overhead, could have dramatically more productive results with the money than the large burdened companies yet the money was given out based on political career advantages for the administrators rather than the technology advantages for Americans.

    The way the ATVM people set it up (Google “Siry says stifles innovation” for more), the smaller applicants were prevented from getting outside investor funding.

    All of the people that reviewed the applications had political and financial connections to GM, Ford, Chrysler and the large Detroit recipients.

    Each of those smaller American companies had technology and resources that presented a powerful economic threat, if they got the loans, to the large politically connected companies that did receive funds. The big car companies wanted the small companies cut-out at all costs.

    The Section 136 law was written to provide first-come-first serve funding but when the small companies got their applications in first, while the big ones arrogantly felt that they did not even need to apply because it was already pre-staged for them, the ATVM officials changed the rules in order to remove the first-come-first-serve standard of the law in order to cut out the smaller independents.

    Some of the companies that have gotten money have backed out of making the electric cars they said they would make. But they still get to keep the money.

    The Section 136 Law was created by the lobbyists for GM, Ford & Chrysler when they saw that they were about to go bankrupt and wanted to tap into additional taxpayer dollars by claiming the money was going to be used for electric cars in order to win rapid support for Section 136 by tugging at heartstrings. In retrospect, the money mostly went to gasoline car projects. Multiple public hearings have already shown the sister loan guarantee program to have been a failed program via intentional delays, the head was fired and replaced & massive complaints have been filed by many.

    Some of the companies that got the money have already wasted more money than other companies applied for as their total request.

    Some of the companies that got taxpayer loan money are not even American companies and/or are doing their manufacturing offshore with non-American employees. Thus, the ATVM process has cost American’s jobs.

    Those who got the money had to fill out little, or no, paperwork, went through little, or no, review and were connected to the DOE people who gave them the money and shepherded them through the process. Those who they wanted to keep out were forced to jump through more hoops, were slow-tracked in review and had made no political deals via hired law and lobby firms that the big companies has used to conduit “influence”.

    The decision about who would get money was made in 2008 by a private group who then pretended there was a lengthy review throughout 2009 but in fact, the money was pre-wired for a select few.

    All of the things that the rejected small companies (who did not pay lobby fees) were rejected for, were the same things that the insider big companies were doing. In at least two cases, big companies who were in violation of Section 136 rules were guided by reviewer-insiders to change their whole business structure in order to become suddenly “compliant “with section 136 while smaller companies received no such “help”.

    How does this affect you? It cost you and your friends jobs, it delayed American innovation, it made your family have to breath toxic petroleum fumes for another decade, it furthered a corrupt practice and it hurt domestic small business. This was all about money. Controlling who got to make money off of the technology and who got to delay electric cars so the old oil and steel guys could still make money off of their old assets.

  • http://www.saltlakeusedcars.com Salt Lake Used Cars

    Makes me wonder if the DOE application could be requested by the public? If they are asking for that kind of money they should at least be required to explain what they are doing…

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