• Center for Automotive Research Event - Traverse City
  • August 12, 2014 | Author: Steven H. Hilfinger
  • Law Firm: Foley & Lardner LLP - Detroit Office
  • Automotive executives and other industry participants gathered in Traverse City this week for the annual Center for Automotive Research (CAR) Management Briefing Seminars. And, as usual, CAR put on another great show! Several of us from Foley attended, to stay on top of leading industry trends and to enjoy a beautiful Pure Michigan setting with friends and colleagues. One of the presentations of interest was a short talk by Daniel Poneman, Deputy Secretary of the U.S. Department of Energy. Mr. Poneman, a Toledo native, started out by discussing the great “war” between Ohio and Michigan over Toledo in the 1830s. If you are a Toledoan, Ohio “won” that war and got Toledo but as a former Toledoan myself who felt the sting of out of state tuition at the University of Michigan, differing conclusions can be reached.

    On to more serious topics, Mr. Poneman let the audience know that $16.6 billion of funding is still available for deployment by the Department of Energy (DOE) under the Advanced Technology Vehicle Manufacturing (ATVM) loan guaranty program. While most of the grants to date have been large (Ford, Nissan, Tesla, etc.), he encouraged all sized companies to look at applying where their technology can offer 25% better fuel economy performance than the 2005 averages, and noted that about 25% of market products are already there. Other requirements include financial viability and manufacturing in the USA (although foreign companies are eligible), among others. Mr. Poneman acknowledged the difficulty that companies have had in assessing whether they are eligible and tapping program funding, but noted recent improvements and clarity in which companies are eligible, which activities are eligible, and also process improvements such as a new application form and faster turnaround. He also noted that it is not required that the final products be used ONLY in lightweight vehicles, and the requirement of a “reasonable prospect of repayment” does not require 100% signed, sealed and delivered “offtake agreements” (also known in the auto industry as signed PO’s and contracts!) to satisfy this requirement.

    Mr. Poneman has been the chair of the Credit Review Board for the program since its inception, so he spoke with authority. He spent the last few minutes of his talk answering questions and discussing the role of DOE national laboratories in supporting the automotive industry, and other ways that the DOE can help companies through the two “valleys of death” that he described: technology validation and commercialization to scale. (On a smaller scale, I am on the Board of the NextEnergy Center in Detroit, and NEC helps companies with the same challenges.)

    All in all, a small but important piece of the CAR event. Interested companies should work with Foley & Lardner or their other advisers to assess whether application for this funding should be considered.