By Ben Klayman
DETROIT (Reuters) - General Motors' venture
capital unit is buying a minority stake in electric car
start-up Bright Automotive to advance the development of
fuel-efficient vehicle technologies.
GM and Indiana-based Bright Automotive said Tuesday they
have agreed to pursue a strategic partnership under which GM
will invest $5 million to help accelerate Bright's production
of its IDEA plug-in hybrid commercial vehicle.
GM is also launching this year its highly anticipated
Chevrolet Volt electric car for the consumer market, a program
it started four years ago in part to shake an association with
gas-guzzling trucks and to show it could compete with the likes
of Toyota Motor Corp on hybrid technology.
The Bright deal marks the first investment by General
Motors Ventures LLC, a $100 million venture capital arm set up
by the U.S. automaker in June with the aim of investing in auto
and transportation start-ups in areas such as lightweight
materials, clean engine technology and on-board electronics.
"Funding early-stage start-up companies is a new way of
doing business at GM to accelerate the introduction of
innovative technology to support our core automotive business
and give us a competitive advantage," said Jon Lauckner,
president of GM Ventures.
"In this case, our funding of Bright Automotive will
accelerate the introduction of advanced propulsion and
lightweight technologies in the commercial vehicle market."
The companies signed a memorandum of understanding in July.
GM Ventures provided funding to Bright this week, and the
companies intend to complete the formal agreements later this
Upon completion of the agreements and other terms, GM
Ventures will have a minority stake in Bright, and Bright will
have access to GM technologies, and advanced engine and
transmission systems, for its vehicle. The size of the GM stake
in Anderson, Indiana-based Bright was not disclosed.
"With this deal, Bright gets financial support that puts us
on the fast-track toward mass production of the IDEA," said
Reuben Munger, Bright chairman and chief executive.
Bright, which was founded in early 2008, said the
investment will allow it to begin ramping up development of the
production program for the IDEA in the current quarter.
The Bright commercial van, like those used by cable,
telecommunications or utility companies, was originally
intended to launch in 2012 but the recession delayed that to
2013 or 2014, Bright officials said.
Munger said the potential market in North America is
900,000 units a year and the company expects to be able to
produce initially at least 50,000 units annually. The vehicle's
price and where it will be built have not been determined, but
Bright sees more than 1,000 jobs created.
Where the Bright vehicle will be distributed and serviced
has not been determined.
Bright has applied for a low-interest loan from the U.S.
Department of Energy under a program that also has been used to
support Tesla Motors, Nissan Motor Co and
Ford Motor Co.
The IDEA is designed to operate on electric power for about
38 miles before switching to hybrid mode where it would get an
estimated 36 miles per gallon for about 400 miles of total
Last month, GM said it would offer the Volt starting at
$41,000 before federal tax credits. It is designed to be
recharged overnight for about 40 miles of electric driving and
will also include a small gas engine expected to give the
vehicle a total range of about 340 miles.
The U.S. automaker expects to produce 10,000 Volts for the
2011 model year and about 30,000 for 2012.
Tesla, a Silicon Valley start-up that went public in June,
has the only highway-ready electric car now on U.S. roads with
the $109,000 Roadster. It also formed an alliance to develop
electric vehicles with Toyota, which is planning to bring a
plug-in hybrid to market in 2011.
Ford has said it will introduce five electric vehicles by
2013, including a battery-powered version of its Transit
Connect light delivery van.
Nissan's battery-powered Leaf claims a driving range of 100
miles and has a U.S. retail price of $32,780, while Honda Motor
Co has said it plans to launch a plug-in hybrid and
battery electric model in 2012.
(Reporting by Soyoung Kim and Ben Klayman; editing by John
Wallace and Matthew Lewis)