Plug-In Hybrid Maker Bright Automotive Still Struggling to Raise Funding

(MoneyWatch)  INDIANAPOLIS, INDIANA--John Waters, President of Bright Automotive, stops the car in an industrial pocket of Indianapolis and gestures at a nondescript building. "Right there is where we built the batteries for the General Motors EV-1 battery car. In that building, we tested the first large-format lithium-ion batteries that were used on the Segway. And over there, we electrified anything with wheels on it: sports cars, trucks, golf carts."

Anderson, Indiana is 20 miles east of Indianapolis. At one time it had 28,000 General Motors employees, but now many of those buildings are razed. The action today--and Waters and his company are in the thick of it--surrounds battery cars and plug-in hybrids. Waters was a founder of battery maker EnerDel, and that company has a factory here supplying Fisker (plug-in hybrids), Think (battery cars) and others. GM still does battery work here, and also created fleets of GM/Allison hybrid-electric buses.

But not far from GM's facilities is a business incubator named Flagship Enterprise Center, and it is on that gleaming campus that Bright built the Idea, a plug-in hybrid commercial van that could be operated for 41 to 43 cents per mile. The all-aluminum van, with 40 miles of all-electric range and a cavernous rear compartment capable of carrying a flat sheet of plywood, is beautifully finished and drove very well indeed in a short test ride. But there is only the one prototype. And here it is on video: The Idea has drawn interest from a variety of commercial customers, including Frito-Lay, Coca-Cola and FedEx, but before it can make sales Bright has to raise capital for final testing and to build manufacturing capacity.

That capital is, increasingly, available from foreign partners. Waters showed me an intricately carved box, a gift from Chinese visitors interested in a $500 million joint venture. Other foreign investors have also come forward, said Waters, who is enough of a patriot to prefer building the Idea in the U.S.

But that may be difficult. Private capital has been hard to raise in the current climate, and the Department of Energy's $25 billion Advanced Technology Vehicles Manufacturing loan program has funded EV startups Fisker and Tesla, but not Bright. Some $8 billion has been awarded, and there's at least $15 billion to come, but much of that could end up with General Motors or Chrysler (shut out of the first round because they were in bankruptcy). This gets Waters agitated.

"I believe we have a solid business plan, solid investors, solid solutions," Waters said. "But our funding in the U.S. has been delayed while other countries are wooing us. We've held out, but now we're returning their calls. We're losing faith in Capitol Hill." Bright is helping make ends meet with an engineering consulting and services division that is converting gas vehicles to plug-in hybrids and EVs.

Bright is not the only company to feel left out by DOE EV funding. California-based startup companies have also complained that they've been shut out. In a normal economy this probably wouldn't matter, because EVs are like the Internet startups of the 21st century and would naturally attract willing investors. But this is not a normal economy, and the DOE's purse is the only one open for business right now.