Aptera, the sleek carmaker backed by Google and Idealabs, didn’t respond to my inquiry earlier this week about reports of an internal split in which founders Steve Fambro and Chris Anthony had left the company. But in an online report published today by The San Diego Union-Tribune, Aptera officials rejected accounts that Fambro and Anthony were ousted in a boardroom showdown.

The company’s status is a keen issue to some 4,000 people, including celebrities Tom Hanks, Robin Williams, and Shaquille O’Neal, who have put down $500 deposits to be the first to buy one of the three-wheel, two-seater vehicles. The Aptera 2e, the company’s first production vehicle, resembles a wingless plane and is expected to cost between $25,000 and $40,000. Aptera is based in Vista, CA, about 30 miles north of San Diego.

Citing a statement issued by Aptera CEO Paul Wilbur, the Union-Tribune says the carmaker had to adjust its production schedule “to align with financing realities.” Instead of producing its first fuel-efficient model in the fall of 2009, as Aptera announced at the beginning of this year, Wilbur says the company will complete its first vehicles in 2010. About 10 of Aptera’s 40 employees have been laid off.

The company, which has raised at least $27.5 million from Google, Idealabs, and other venture investors, is seeking additional funding, according to Popular Mechanics. Aptera says it also intends to resubmit its application for a $75 million loan from the Department of Energy’s Advanced Technology Vehicles Manufacturing Incentives Program.

Aptera says co-founders Fambro and Anthony were not asked to leave. Fambro remains on the board, but has taken a leave of absence from the company until next year. Anthony is now the CEO of Flux Power, a startup in the San Diego area that is developing battery-management systems. In another online account published by Popular Mechanics magazine, Fambro also voiced his continuing support for CEO Wilbur.

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Paul Wilbur, a Detroit auto industry veteran who was named CEO of Carlsbad, CA-based Aptera 14 months ago, gave no indication of internal turmoil at the futuristic car’s headquarters when he appeared last week at an event sponsored by Cleantech San Diego.

But as Darryl Siry reports today on Wired’s Autotopia blog, a prolonged power struggle that pitted Aptera founders Steve Fambro and Chris Anthony against Wilbur and Aptera board members apparently came to a head in recent weeks. Wired says rumors about the founders’ departure, as well as layoffs amid financial difficulties, began appearing last week on the Aptera Forum, an online message board for Aptera car enthusiasts. Aptera did not immediately respond to an e-mail query seeking the company’s response to the reports. According to Wired, the company says it’s slowing down its burn rate while waiting for the Department of Energy to review its loan application, and maintains that its relationship with Fambro and Anthony remains positive.

Fambro, who founded Aptera about six years ago, has previously said his aim with the company was to build a safe and comfortable passenger vehicle that was more fuel-efficient than anything else on the road. The company says the prototype of its aerodynamic pod-shaped, three-wheel vehicle gets 230 miles to the gallon.

Aptera raised about $24 million roughly 18 months ago from investors that include Google and Idealab. CEO Wilbur told me last year that the company was having no trouble attracting additional funding, but the Wired blog reports that additional funding has in fact been difficult to secure during a drawn-out battle over which course the company should be steering.

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San Diego-based V-Vehicle has begun work intended to double the size of a former GM parts plant in Monroe, LA, according to The News Star newspaper. David Hitchcock, V-Vehicle’s director of assembly operations, told the newspaper that construction of the 400,000-square-foot plant is expected to be completed in less than a year, which would be mid-2010. The startup carmaker, which has venture funding from Google and Kleiner Perkins, has announced plans to manufacture a greener and more fuel-efficient automobile.

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Boston-based uLocate, maker of the “Where” platform for location-based applications on mobile devices, today announced the launch of a new iPhone application called Traffic.com. Using maps and data from Navteq’s website of the same name, the application detects the user’s location and shows which local roads and highways are congested. The app, which appeared in Apple’s iTunes App Store last week and is already the store’s top traffic application, also allows users to get accident reports and other traffic data create for a customized set of frequently traveled routes.

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[Updated 9/3/09, 3:00 pm. See below.] Bellevue, WA-based VoiceBox Technologies, a developer of speech recognition systems for use in cars and mobile applications, has raised about $13 million from corporate investors in Asia over the past year. The investors include AutoNavi, Inventec, MiTAC, and the Morningside investment fund.

[An earlier version of this story cited a regulatory filing stating that VoiceBox had raised $7.4 million in equity and options out of an $18.6 million offering, and said the investors were not disclosed---Eds.]

Chief strategy officer Victor Melfi of VoiceBox says the company has raised a total of about $21 million to date, including investments from friends and family, and InfoSpace. He adds that VoiceBox is now looking to raise an additional $15 million from institutional investors, for which it has signed on Seattle investment bank Cascadia Capital. Melfi says VoiceBox is sensitive to customers in Europe and Asia—particularly China—and that it is developing technology for nine different languages. [This paragraph was added at 3:00 pm after speaking with Melfi---Eds.]

VoiceBox is developing what it calls “conversational voice search” software that lets you search, navigate, and discover content and services using natural spoken language. An example would be telling your car to give you directions to a particular location, pick a song to play, and adjust the temperature—all while you’re driving. Or telling your smartphone to search for a stock quote or other information online while you’re on the go.

Technologically, it’s a very hard problem. That’s because of ambient noise, differences between people’s accents and the way they make requests, and, fundamentally, the challenge of correctly understanding the meaning of what they’re asking for. Voicebox has partnerships with a number of companies including IBM, Toyota, and XM Satellite Radio to refine its software. The company also has an iPhone app for voice dialing.

VoiceBox was incorporated in 2001, and is led by its co-founder, chairman, and CEO Mike Kennewick, a former manager at Digital Equipment Corporation and then Microsoft. Kennewick previously founded Saros, a document management software company that was bought by FileNet in 1996. As of January 2008, VoiceBox had not taken any venture funding, but was considering taking a round, according to VentureBeat.

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Think, the Oslo, Norway-based startup developing long-range electric vehicles, announced yesterday that it has exited bankruptcy protection and raised $47 in new funding, with cleantech venture firm RockPort Capital Partners of Boston as one of the return investors. New investors in the round included New York-based lithium ion battery developer Ener1 (NASDAQ: HEV), Finland’s Valmet Automotive, and Investinor, an investment fund backed by the Norwegian government. The new funding brings Think’s total financing to more than $130 million.

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Google Ventures has joined Silicon Valley’s Kleiner Perkins Caufield & Byers as an investor in V-Vehicle Co., the San Diego-based startup automaker developing a new line of fuel-efficient cars. The company plans to build its cars in northeastern Louisiana.

Joe Fisher, a New York spokesman for the San Diego startup automaker, confirmed the corporate venture fund’s investment, which was not previously disclosed. The clue was in a recent regulatory filing, which lists David Drummond as a member of V-Vehicle’s board of directors. Fisher confirms he’s David C. Drummond, Google’s senior vice president for corporate development and chief legal officer. But the spokesman declined to say how much Google has invested.

V-Vehicle’s regulatory filing shows the green automotive startup has raised almost $62.26 million in venture funding, and plans to raise an additional $4 million in the current round. When V-Vehicle made its debut at a news conference with Louisiana Gov. Bobby Jindal about six weeks earlier, press reports indicated that Frank Varasano, the former Oracle executive who is the automaker’s founding CEO, already had lined up $100 million in venture funding.

At the time, the company said its prominent investors included Silicon Valley VC firm Kleiner Perkins Caufield & Byers and T. Boone Pickens, the Texas energy maverick. Two Kleiner Perkins partners, John Doerr and Ray Lane, also have seats on the company’s board. But Pickens investment, if he’s made one, is not apparent in the filing. The filing lists V-Vehicle’s directors as Varasano, Lane, Doerr, and Drummond.

The VC funding qualifies V-Vehicle to a portion—about $10 million—out of an anticipated total of $67 million in Louisiana state economic development funds. The company plans to begin renovation next year of a shuttered auto parts factory in Monroe, LA, where it plans to assemble its “green” car. James Davison, a Ruston, LA, trucking magnate who owns the property, also was identified in June as an investor.

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Where I grew up in the Midwest in the 1970s and early 80s, Cray was synonymous with supercomputing. Back then, a supercomputer was a top-flight machine that could perform a few hundred million floating point operations per second (”flops”). That was good enough to help scientists do intensive calculations in areas like weather forecasting, climate modeling, and nuclear weapons simulations. Cray’s first supercomputer, the famed Cray-1, was bought by Los Alamos National Laboratory for $8.8 million in 1976; eventually, some 80 of the machines were sold, for $5 million to $8 million a pop.

Today, your average desktop computer is far more powerful than a Cray-1, and so the definition of “supercomputer” keeps changing to keep up with the times. But one thing has not changed. Cray (NASDAQ: CRAY) is still a major player in the space, despite a long history of ups and downs. The company, which began in 1972 as Cray Research in Chippewa Falls, WI, was bought by Silicon Graphics in 1996 for $767 million, and then was reborn in Seattle in 2000 following a $50 million merger with Tera Computer (which was renamed Cray). Since then, it has been a long uphill climb to get back near the top of the supercomputing heap against heavyweight competitors like IBM and Hewlett-Packard.

Nobody better to tell that story than Peter Ungaro, the chief executive of Cray. I recently had a chance to speak with Ungaro by phone at his Spokane, WA, office about his company’s strategy and recent history, the technical challenges involved in modern supercomputing, and innovative ways of gaining new customers (how do you sell someone a $10 million machine?). What impressed me was his ability to lay out the financial concerns of his company while also diving deep into the technological aspects of supercomputers—how they will interact with cloud computing, how computational records will continue to be broken, and when computers might exceed all processing capabilities of the human brain.

First off, I wanted to know how Ungaro (left) defines a “supercomputer” these days. Some would say it should be one of the 500 fastest machines in the world. Others would say it’s a machine used for scientific and technical problems that costs more than a certain amount. Ungaro’s definition is simple and focuses on the bottom line. “We like to think of supercomputers as costing more than a million dollars,” he says.

Ungaro, a Washington State University alum, joined Cray in 2003 to run sales and marketing as senior vice president. He had been at IBM for 13 years, most recently running its high performance computing group, a $2 billion business inside Big Blue. Why did he make the jump to Cray? “I really loved the supercomputing space,” Ungaro says. “Customers are doing really interesting things. I really wanted to try and see what a smaller company was like. Even at $2 billion, you’re only 2 percent of IBM’s revenues.” In short, like many entrepreneurs, he wanted to have more impact. “There was no better place to go than Cray. It was a natural move.”

But Cray had its share of problems. The company had struggled to get its next-generation supercomputer product ready, and 2004 was “really rough,” Ungaro says. Cray was losing money and …Next Page »

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Local Motors, the Wareham, MA startup building crowd-sourced cars, has announced that starting at noon Wednesday, customers can go online to get in line to buy a Rally Fighter, the company’s first production vehicle. The $50,000 car, which we’ve described in the past as “half muscle car, half dune buggy,” contains a 265-horsepower, 3.0-liter, clean diesel BMW engine. Buyers can put down $99 today to buy a number in line, put down $5,000 later to lock in a build date, and pay the remaining $44,901 on delivery.

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Xconomy has learned that MicroGreen Polymers, an Arlington, WA-based developer of technology to recycle plastics into cheaper, environmentally friendly coffee cups among other things, has raised $1.6 million for expansion from WRF Capital and local angel investors (Northwest Energy Angels, Alliance of Angels, and Atlas Accelerator), out of an ongoing round the company expects will net $3 to $4 million later this month.

The money will be used to build up MicroGreen’s commercial manufacturing capacity, and boost its payroll from 9 people to as many as 30 over the next year, says CEO Tom Malone. The company is also scouting new locations, likely to be in Everett, WA, he says.

MicroGreen got started in 2002, when it spun out of the University of Washington. The basic idea from founders Greg Branch and Krishna Nadella, a pair of graduate students, was to see if they could develop a technique to squeeze high-pressure liquid carbon dioxide into plastics, to heat them up and expand them while in a solid state. This process creates billions of tiny microbubbles that allow manufacturers to maintain most of the properties of regular plastic, while using a lot less of the regular plastic that is made from oil. The MicroGreen technique also creates a handy insulating layer of air inside the plastic, which can protect your hand from getting burned while holding that hot morning coffee. But plastics are everywhere in the modern world, and MicroGreen Polymers sees plenty of opportunities to stick its recycled product into markets that are worth billions.

“We can use less plastic to do the same work,” Malone says. “It’s a less-is-more story.”

The technology, which MicroGreen calls “Ad-air” does just that—it adds air bubbles into recycled PET plastics (like the stuff from water and soda bottles), which makes the subsequent product lighter, uses less material, and makes it cheaper, Malone says. It retains many, but not all of the same properties as the original plastic, so it can’t be used for everything, he says.

The initial applications of the MicroGreen technology have been for a reflector plate that a Japanese manufacturer used to make liquid crystal display TVs appear brighter, and for a contract with Northrup Grumman to help make some electronics equipment lighter, Malone says. These aren’t huge clients, generating revenue of about $1 million last year, and almost $2 million this year, Malone says.

Bigger opportunities lie ahead in disposable coffee cups, food packaging such as …Next Page »

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When Louisiana Gov. Bobby Jindal announced that a startup automaker based in San Diego will build a new line of fuel-efficient cars in Monroe, LA, nobody was more surprised than some folks at Cleantech San Diego.

The V-Vehicle Company, founded in 2006 by former Oracle executive Frank Varasano, says it “will produce a high-quality, environmentally friendly, and fuel-efficient car for the U.S. market.” But where did this secretive company come from? Why is it based in San Diego? And how green is V-Vehicle? The company provided no details about the car itself, such as what type of fuel it will use or specifically why it is environmentally friendly.

“We’re trying to be protective of the things we need to be (because of potential competition),” Varasano told reporters at the briefing in Monroe, LA. The only other tidbit disclosed is that Tom Motano, who’s credited with designing Mazda’s MX-5 Miata, is leading the V-Vehicle design team.

The news naturally piqued the curiosity of some board members at CleanTech San Diego, a non-profit industry group formed to accelerate the region’s legions of green technology and alternative energy companies. One CleanTech San Diego board member told me he wonders what the ‘V’ in V-Vehicle stands for: V-8? Victory? Virtual? Vaporware?

“Most people think it stands for Varasano,” says Joe Fisher, a spokesman for the company. (Before his stint at Oracle, V-Vehicle’s founding CEO was an engineering and manufacturing practice leader at Booz Allen Hamilton. Varasano earned his M.B.A. from Harvard, and served aboard the nuclear submarine Patrick Henry after graduating from the U.S. Naval Academy.) But Fisher says the V instead refers to “value.”

V-Vehicle Headquarters

Another question: Why is V-Vehicle’s headquarters in San Diego? A little online research shows V-Vehicle’s corporate headquarters is on 16th street, just east of the Padres’ new baseball stadium downtown. But there’s not much to see at the refurbished gray two-story building, with its Art Deco-inspired façade. Fisher says that’s easy to explain: V-Vehicle is based in San Diego because Varasano lives here.

Among other tantalizing facts observers are pondering is that V-Vehicle’s investors include the famed Silicon Valley venture firm Kleiner Perkins Caufield & Byers, which also has invested in Fisker Automotive, the Irvine, CA, company developing the $80,000 Fisker Karma, a plug-in hybrid electric luxury car. Kleiner managing partner and former Oracle President Ray Lane, who also serves on the boards at Fisker and electric carmaker Th!nk North America, is chairman of V-Vehicle’s board.

Perhaps because of Kleiner Perkins’ backing, at least one …Next Page »

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The coming generation of electric and hybrid gas-electric vehicles will need safer, longer-lasting, faster-charging batteries. Boston-Power—the Westborough, MA-based known up to now mainly for its “green” lithium-ion laptop batteries—wants to supply them, and it’s pursuing federal stimulus money to fuel its bid.

At a planned media event today featuring Massachusetts Governor Deval Patrick, the company will introduce a new “green” lithium-ion battery for electric and hybrid cars called Swing. To build the new product, the company is unveiling plans for a 455,000-square-foot manufacturing facility to be located in Auburn, MA, a Worcester suburb about an hour’s drive from Boston.

Boston-Power says the proposed facility could create 600 new jobs, and both the company and state officials are describing it as a major step toward making Massachusetts into a vehicle battery mecca. “This is the state of innovation,” says Christina Lampe-Onnerud, Boston-Power’s founder and CEO. “It’s a state that is committed to clean technology and has been for a long time. We put Boston-Power’s headquarters here for the same reason. We believe manufacturing should be close to the innovation.” (Below is a complete interview with Lampe-Onnerud, who will also be a featured speaker at the June 24 Xconomy Summit on Innovation, Technology, and Entrepreneurship.)

Indeed, Boston-Power’s project, along with similar efforts at Watertown, MA-based A123Systems, could give the state a key foothold in the reborn auto industry if, as expected, federal bailout conditions force American automakers to retool for a new generation of greener vehicles. A123 landed a deal in April to supply Chrysler with lithium-ion batteries based on its MIT-bred nanophosphate technology. (Those batteries, however, will be built in Michigan rather than Massachusetts, thanks to a $100 million tax-credit lure extended by the Michigan Economic Development Corporation.)

Boston-Power’s plan to build in Massachusetts hinges on its ability to lasso a big chunk of federal stimulus cash. The American Recovery and Reinvestment Act of 2009, known colloquially as the stimulus bill, provides $2 billion for “facility funding awards” for “manufacturers of advanced battery systems and vehicle batteries that are produced in the United States, including advanced lithium ion batteries.” Boston-Power is applying for $100 million of that money. It also plans to hit up the Department of Defense for funds designated in the proposed 2010 federal budget for the construction of manufacturing facilities that contribute to national security.

The Commonwealth of Massachusetts has pledged up to $9 million for the Auburn facility—but that money is in the form of matching financing, meaning Boston-Power will have to secure the federal money first. The company says it’s “working closely” with state officials, including Governor Patrick, energy and environmental affairs secretary Ian Bowles, and Representative Jim McGovern (a Democrat who district includes Auburn), to pursue federal and state incentives.

Lampe-Onnerud says building the Auburn facility will cost far more than the $100 million the company is seeking from the U.S. government, but that “it’s enough to get private investors to believe that you can do battery manufacturing in the United States.” Without some pump-priming in the form of federal stimulus spending, she says, the financial markets might not back risky technologies in areas like energy and clean technology. “What I think the Obama Administration has realized, to its credit, is that if we want to be a player, the government has to help,” Lampe-Onnerud says. “It will not happen on its own.”

Boston-Power isn’t saying much yet about the Swing product itself, except that it will set new standards in the vehicle battery business for safety, lifetime, weight, cost, environmental sustainability, and energy density. (Lithium-ion batteries have a higher energy density, or energy output per weight, than most other battery technologies, and both A123 and Boston-Power have come up with engineering tricks that make it even higher.) But Lampe-Onnerud says the Swing builds on the same basic technology platform as the Sonata, which is marketed by Hewlett-Packard under the Enviro brand name. She adds that the manufacturing blueprints and procedures the company has already developed for its Sonata factories in Asia can be adapted relatively easily to make larger-format batteries for cars here in the United States.

And using an existing building—a warehouse off I-90 once used by the rapidly downsizing Filene’s Basement bargain clothing chain—will hasten the project, Lampe-Onnerud says. “This factory will be up and running full speed within three years, which is very fast in the battery industry,” she says. “We have experience with this type of manufacturing in Asia, so I think it’s a low-risk investment for the government.”

Boston-Power and other applicants for the battery-manufacturing grants have already submitted proposals to the government, and the Department of Energy plans to announce a list of grant recipients as early as July. Governor Patrick, Secretary Bowles, Rep. McGovern, Lampe-Onnerud, and other officials plan to promote the Boston-Power proposal at a noon ceremony today at the Auburn site.

Xconomy spoke with Lampe-Onnerud about the project Friday evening; a transcript follows.

Xconomy: How much of the actual cost of the proposed Auburn plant would be covered by the $100 million stimulus grant you’re seeking?

Christina Lampe-Onnerud: It’s not the whole amount, by far, but it’s enough to get private investors to believe that you can do battery manufacturing in the United States. For a company like ours, cash flow is everything. I believe that Boston-Power, 10 years out, will be a smashing success. But it’s tough in the early years because you’re growing the company at the same time you’re growing the top line. Revenue needs to grow and you need to establish market share at the same time as you’re innovating. This will allow us to …Next Page »

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A year ago this week, Cambridge, MA-based speech software company Vlingo released its first study of the texting-while-driving phenomenon, finding that 28 percent of all survey respondents admitted to sending text messages while behind the wheels of their cars. It’s a hazardous habits that, with the recent Green Line trolley accident in Boston (linked to alleged texting by the trolley’s driver), has been in the local news recently. The good news in Vlingo’s second annual study, released today, is that texting-while-driving is down slightly nationally: only 26 percent of drivers admitted to engaging in the behavior this year. The bad news is that drivers in Massachusetts are apparently texting more from their cars than last year (or are at least admitting to it more openly): the state ranked 23rd worst in the nation in the 2008 rankings, but advanced to the 11th worst slot this year, with 30 percent of respondents saying they text while driving.

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The Rally Fighter is half dune buggy, half muscle car. Designed for off-road racing in the deserts of the Southwest, it looks a lot like any ride you might see on the cover of Road & Track. But what’s different about the Rally Fighter is that it’s a product of the Web 2.0 revolution: it was the winning design in an online competition that Wareham, MA-based Local Motors conducted last fall among its growing Web-based community of amateur and freelance automotive designers.

Crowdsourcing the design process through regionally-themed online design contests is half of Local Motors’ business model. The other half is “mass customizing” the actual vehicles at a network of what the company calls “micro-factories.” If you’re going to start a car company these days, you might as well try a radical new approach—and that’s definitely what co-founder, president, and CEO Jay Rogers is doing. My December 18 story has all the history and details.

On Friday, I reconnected with Iraq vet and Harvard MBA Rogers by phone to get the latest news about Local Motors—and to ask him for his opinion about other vehicle-related events in the news, including the first flight of Terrafugia’s “roadable aircraft” and this week’s unveiling by GM and Segway of the P.U.M.A., a multi-passenger vehicle that balances on two wheels like the famous Segway Personal Transporter. I also probed a bit about the seeming disconnect between Local Motors’ self-avowed green mission—he talked a lot back in December about the nation’s dependence on foreign oil, and about how to make cars lighter and more fuel-efficient—and the fact that the company’s first product is a racecar built to tear around the desert. He had some interesting responses, which you’ll see toward the end of the following transcript.

Xconomy: We last talked in mid-December. What’s been happening at Local Motors since then?

Local Motors CEO and co-founder Jay Rogers

Jay Rogers: We just passed our first anniversary, and one of the big things that stands out is that on the day of our birthday, March 25, we were invited to a Web-based conference [organized by Canadian automotive journalist Michael Banovsky] with Bertone, one of the top two automotive design houses in the world. It was an incredible recognition of what we have achieved in just 12 months. We are known enough that people see us as a design firm that has put together something notable. It shows the power of Web 2.0 to create a new entity. These older design houses don’t have the bandwidth to create a lot of new concepts, and as governments and everyone else around the world are looking at how to reinvigorate stale parts of the auto industry, we make a very compelling alternative.

Since December we have also run two or three more competitions. We just finished Chicago and the Carolinas and are about to launch Detroit. That is going to be much more toward the practical end than the conceptual end. We are going to do a design for the budding entrepreneurs in Detroit. A lot of machinists and pattern makers, as you can imagine, are out of work. What they need is a jobber’s car—a coupe with a roach coach or a hold for a set of tools, something that’s economical and isn’t a big truck. It’s going to be a real exercise in how Local Motors can target a vehicle that is relevant to a local area, especially one that is as embattled as Detroit.

The other thing is that we are in negotiations right now in Phoenix, Arizona, and here in Massachusetts to place our first micro-factory. We don’t have anything to announce just yet, but we are in some very exciting negotiations and are going to end up with a very good location in one or the other place, or it could very well be both.

We were also applying for the federal assistance program from the Department of Energy for new vehicle manufacturing concepts. At the time we last talked, GM and Chrysler were looking to hog a lot of that money. But this week, those companies were determined to be non-viable, which means they are not eligible for those loans. Which means we have a much better shot at getting some money. That’s a very positive thing.

One more thing we did which was actually very exciting was that we began to flex our muscles in the competitions, and instead of just doing exterior design, we ran an interior design competition for the Rally Fighter, our first model. Critics were saying “You can’t open-source the design of a car,” but this showed an entirely different face of our design competition. The winning concept is now going to be the interior of the Rally Fighter.

We are also breaking down [the design competitions] into discrete parts. We needed an air extractor for our engine bay, and we got 50 to 60 side-vent ideas in about six days. We posted it Friday night and we were done by the next Wednesday. Because this was so successful, we are going to be running more discrete engineering projects as competitions, instead of us doing them ourselves. It’s great for us to go to the community like this.

X: How is the Rally Fighter coming? When I visited, you had a full-scale model, but it was made of blue foam.

JR: The Rally Fighter’s body is going to be frozen this week. That means the look and feel, all of the micro-details, which is a huge achievement for us. If you were to look at it today, you’d see a …Next Page »

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Sitting in the cockpit of a brand new 2010 Chevy Camaro SS (red paint job with 6-speed manual transmission), Rob Einaudi probably has better things to do than talk to the media. But I reached Einaudi, the editor-in-chief of CarDomain.com, yesterday at the New York International Auto Show, where he was taking this particular sports car for a spin. “Everyone’s looking at us,” he said.

Everyone back in Seattle is also wondering how his local company, CarDomain, will fare in its merger with Los Angeles-based StreetFire.net. The all-stock deal was announced on Wednesday, and the combined company, called CarDomain Network, will be run by CEO Glenn Rogers from StreetFire, while CarDomain founder Alex Algard will have say about long-range strategy as its chairman. For now, the two websites and their respective teams will remain separate. CarDomain currently has a dozen employees, and StreetFire’s staff is about the same size; both teams have undergone layoffs in recent months.

“The plan is to keep basically the status quo,” said Einaudi, who has both editorial and business development duties at CarDomain. “For the first 60 days, we’ll feel things out a little. There will probably be minor adjustments and some redundancies…We’ll streamline both sites a bit.”

From a business standpoint, the deal makes a lot of sense, as CarDomain.com and StreetFire.net complement each other’s strengths. As Einaudi puts it, “It’s a perfectly natural fit. We’d started to build out video but hadn’t gotten traction. They’d started to build out a community but hadn’t gotten traction. It’s a perfect marriage.” He adds that there is no big change in business strategy planned, but now “their ad sales guys can sell across CarDomain, and our ad sales guy can sell across StreetFire.”

CarDomain also generates revenue by connecting car sellers and shoppers through its online auto marketplace, powered by Vast.com, which it rolled out last June. This is an important area to watch, as it is much closer to the point of sale for cars, so it might be more straightforward for CarDomain to capture revenue through this site. Seattle-based startup Frugal Mechanic, a product search engine for auto parts, fits this mold and got funded two months ago when it was already on the brink of cashflow break-even. (CarDomain is a partner of Frugal’s.)

But with the auto industry imploding, and consumer websites facing harsh financial realities (especially Web 2.0 community sites that depend on advertising revenue), it looks to be an uphill climb. Einaudi said he couldn’t speak for consumer Internet companies as a whole. “But in automotive, there are a lot of sites dropping like flies,” he said, citing as an example ForbesAutos.com, which shut down last November. “People are having trouble monetizing content, and keeping auto content alive.”

I’m reminded of early-stage tech investor Andy Sack’s prognostications at a financing forum last month: “There’s going to be a great washout of Web 2.0 investments. There’ll be a lot of carnage.” Indeed, for CarDomain and its former rival, banding together may be the best chance they’ve got to survive.

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Which San Diego firms are the most inventive? When the 2008 year-end patent figures recently became available, we decided to find out. Xconomy is listing the top 25 patent winners in the San Diego region below, based on data provided by IFI Patent Intelligence of Wilmington, DE. Our compilation includes a few surprises.

San Diego-based Qualcomm might reasonably be expected to lead the region in patents issued in 2008—and with its longtime leadership in wireless technology, indeed that was the case. Yet the company that garnered the second-highest number of patents last year is not a major engineering research and development conglomerate like SAIC, but Callaway Golf, the Carlsbad-based maker of high-end golf clubs.

Some also might find it surprising to see a startup company in the top 10, since prosecuting patents is neither cheap nor routine—and startups are typically founded on a sole technology. Yet San Diego’s Fallbrook Technologies ranks No. 8 on our list, with 21 patents issued in 2008, which was a decline from 31 patents awarded to Fallbrook in 2007. The venture-backed startup has more than 300 patents issued or pending for its revolutionary transmission design.

In preparing the data, IFI analyzed 2008 utility patents assigned to companies by the U.S. Patent and Trademark Office. IBM continued to top the national list in 2008, with 4,186 patents issued, and U.S. companies accounted for 49 percent of all …Next Page »

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One good turn deserves another, and San Diego alternative transmission maker Fallbrook Technologies is ready to shift to the next level. After working more than 10 years to develop a radical new transmission design that helps motors operate more efficiently, Fallbrook announced today it has secured $25.4 million in its first round of venture funding.

NGEN Partners, a Santa Barbara cleantech venture firm, led the financing with a $10 million investment. Another $10 million came from Robeco, the investment arm of Rabobank of The Netherlands. The remaining $5.4 million came from many of the company’s true believers, the angel investors who provided some $25 million in private funding to Fallbrook since the company was founded in 1998.

The additional funding is intended to help Fallbrook gear up and extend the commercialization of its proprietary “NuVinci” technology, a continuously variable “planetary” transmission that smoothly adjusts to increasing speeds without the need to change gears. A more detailed explanation is here.

Fallbrook introduced its transmission in markets for light electric vehicles and bicycles in 2006, and the company says market acceptance has increased steadily—especially in Europe. The company says a NuVinci-equipped bicycle won “Bike of the Year” in The Netherlands and the iF Design EUROBIKE Gold 2008 Award—which helps explain why the Dutch investment bank’s cleantech fund is in the deal. NGEN managing director Steven Parry …Next Page »

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Battery manufacturer A123 Systems of Watertown, MA, said yesterday that it has applied to the Department of Energy for $1.84 billion in federal loans under the department’s “green car” program. A123 says it wants to use the money to build a factory in southeastern Michigan that will manufacture lithium ion batteries for up to 5 million hybrid vehicles per year, or 500,000 plug-in electric vehicles per year, by 2013. Executives at Chrysler and GM, Michigan Governor Jennifer Granholm, Senators Carl Levin and Debbie Stabenow, and Representative John Dingell, as well as Massachusetts Senator John Kerry all voiced their support for A123’s application under the DoE’s Advanced Technology Vehicles Manufacturing Incentive Program.

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Kirkland, WA-based Neural Audio, a digital sound company, has been acquired by DTS (NASDAQ: DTSI), a technology and entertainment firm in Agoura Hills, CA. The purchase price was $7.5 million in cash, with DTS also agreeing to pay up to $7.5 million more over the next five years if certain conditions are met. No other terms were disclosed. The deal closed on December 31.

Neural Audio focuses on audio signal processing for playback of music, movies, broadcast programs, and video games. Its main markets are digital TV, satellite radio, consumer electronics, and gaming. “The acquisition of Neural Audio strengthens DTS’ position in the important broadcast and automotive markets while also providing immediate access to the evolving satellite and HD radio industries,” said Jon Kirchner, president and chief executive of DTS, in a statement. “We are acquiring an extremely talented team of professionals who we expect will enhance our technology expertise and market knowledge.”

No word yet on the fate of Neural Audio’s Kirkland office, or its employees. The company was founded in 2000 by engineers Paul Hubert and Robert Reams, with the goal of commercializing signal-processing techniques to improve the quality of music files and other audio programs.

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Local Motors, a Wareham, MA, startup that has incorporated Web-based community collaboration into its unconventional new process for designing consumer automobiles, today announced the winner of its latest online auto design competition, which challenged community members to come up with a design fit for Boston’s narrow streets and urban lifestyles. Mihai Panaitescu, a Romanian who attends Istituto Europeo di Design (IED) in Turin, Italy, won Local Motors’ $2,000 first prize for the “Boston Bullet,” a three-passenger electric-powered sports car with a transparent roof.

It’s the seventh time Local Motors has run an online competition since launching its online design studio in March, and the fifth time it’s used a geographic theme (previous challenges imposed engineering requirements specific to Miami, Southern California, Hawaii, and Manhattan). Members of the Local Motors Web community chose Panaitescu’s design from more than 50 submissions through an online vote.

The competitions are the company’s way of generating designs for its nascent car manufacturing effort, which I’ve described at length in a separate post. If the company decides to build a production car based on Panaitescu’s design, he will earn an additional $10,000.

Panaitescu describes the Boston Bullet as “a vehicle for narrow city streets and quick nature escapes.” The second-place winner in Local Motors’ Boston competition was Vietnamese designer Huyng Ngoc Lan, who proposes building a 2-seat diesel called the “Combatant Concept” (shown at left). Grégory Rossi of France took third place for the P-s4h, a compact with extra cargo space.

Jay Rogers, Local Motors’ co-founder and CEO, says the company’s online design competitions—which are partly modeled on the design challenges sponsored by Threadless, a trendy Web-based T-shirt maker—have already attracted more than 1,600 participants who have submitted over 20,000 designs. “They come because there is a chance that their car will actually be made,” Rogers says. “The design studios in Detroit are blocked off from most people—you have to take a job there and then spent ten years as an apprentice just to get the chance to be the lead designer on a car.”

Local Motors has chosen one of the car designs submitted by a community member, Sangho Kim’s Rally Fighter, as the basis for its first production vehicle. The company hopes to deliver the first finished car next November.

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