Photograph courtesy Bright Automotive, Inc.
Photograph courtesy Bright Automotive, Inc.
Published September 20, 2010
When exploring a European city, one of the many differences an American might notice is how people get around. Look a little closer, and the traveler might notice differences in how things get around, too. While full-sized trucks and vans commonly deliver goods in U.S. cities, a more varied fleet that includes smaller, more efficient vans does the job in Europe, as in most markets outside North America.
A company in Anderson, Indiana, called Bright Automotive, which recently scored the first investment from General Motors’ new venture capital arm, aims to help steer commercial fleets toward more efficient options by decoupling size from efficiency. In other words, it lets customers have their cake (sip less fuel) and eat it too (carry more stuff). To accomplish this, Bright is developing a plug-in hybrid van called the IDEA with advanced materials that could shave thousands of pounds off the weight of conventional counterparts.
Staying in the Electric Vehicle Race
Bright vice chairman and founder John Waters caught the electric car bug in the 1990s when he was an engineer working on GM’s electric EV1 model—a project that made him realize he could “be part of the solution” for smog-choked cities, he recalled in a recent interview. “That’s what made it so crushing,” he said, when automakers started pulling out of the electric vehicle game.
Waters, however, stayed in. He eventually joined the Rocky Mountain Institute, or RMI, a Colorado think tank (Editor’s Note: Amory Lovins, chair of RMI is an advisor to National Geographic’s Great Energy Challenge initiative.)
(Related: Amory Lovins, Efficiency Advocate)
Helping corporations like Alcoa and Johnson Controls craft strategies for alternative fuel vehicles, he became known among some clients for “preaching the gospel of electrification,” said colleague Michael Brylawski. Today, that old electrification gospel enjoys a growing congregation, from Silicon Valley to Detroit to Capitol Hill.
According to GM Ventures President Jon Lauckner, GM hopes its $5 million investment and future collaboration with Bright will advance GM’s work on plug-in hybrid technology, fuel-efficient propulsion systems, and alternative materials. At this point, said Bright CEO and Chairman Reuben Munger, the two companies have agreed to the idea of sharing parts, but they now have to go through the “engineering and legal exercise” of integrating GM parts into the IDEA design.
Having spun the company out of RMI in January 2008, Bright aims to commercialize the IDEA within a few years—if long-sought loans from the Department of Energy come through. Waters described the IDEA, unveiled in prototype last year, as a “physics-based solution,” a vehicle that employs lighter, high-strength materials—including an aluminum body and carbon fiber components—as well as an aerodynamic design and other engineering tweaks to boost efficiency without shrinking cargo room.
Bright ultimately hopes to transform commercial fleets whose trucks and vans chug along U.S. roadways with an average fuel economy of 12-19 miles per gallon. The company claims the IDEA can traverse about 38 miles in its all-electric mode before it switches into a hybrid mode that gets between 36 and 38 miles per gallon.
GM Ventures’ investment in the 30-person company comes at a time when GM is gearing up for the November launch of its Chevy Volt sedan, its first plug-in vehicle since the EV-1, and a slew of other car makers have plug-in hybrid and all-electric models in the works. At the same time, as automakers face tightening fuel economy standards and limited budgets for in-house technology development, said J.D. Power and Associates power train analyst Kevin Riddell, they are increasingly “open to many avenues,” including partnerships with smaller, more nimble players.
According to Bright executives, the start-up’s real challenge will be competing not in the niche market for plug-in vehicles, but rather in the broader market for commercial vans and trucks. As Brylawski, Bright’s corporate strategy chief, put it, “That’s the flip we’re trying to pioneer.”
Bright’s target market is just starting to heat up in North America. Decades of relatively cheap and stable fuel costs in the United States have meant that many fleet managers have stuck with heavy-duty vans and trucks as their mainstay, Riddell explained. Higher fuel prices and taxation (as well as narrow city streets and customer preferences) in European and other global markets have helped nourish demand for more small and mid-size cargo vehicles in the commercial fleet market. These include the Renault Kangoo, Ford Transit Connect, Mercedes-Benz Sprinter, Citroen Berlingo, Hafei Minibus, and Fiat Fiorino.
In Bright’s view, the holy grail in this race is lower cost of ownership. With every one-cent increase in the price of a gallon of gas, said Brylawski, a large fleet operator like the U.S. Postal Service can “feel pain” on the order of an $8 million hit to its bottom line. Bright needs to persuade fleet managers to consider not just the initial purchase price of the vehicle, but the money they spend on fuel over the vehicle’s life. Although as a plug-in hybrid the Bright IDEA inevitably will cost more up front than traditional heavy-duty vans, the company believes it can drive down fuel costs substantially.
Not the Parts, but the Whole
Waters says Bright has been able to improve fuel efficiency in part by ignoring the auto industry’s old mantra, “Lower your spec.” Instead of urging its engineers to lower the cost of particular parts, Bright looks at the vehicle as a whole, with the aim of minimizing weight and drag . Ultimately these design choices could contribute to savings of up to 18 cents per mile and 1,500 gallons of fuel per year for some fleet customers. “There’s no ‘unobtanium’ or magic materials,” just a systems approach to engineering, said Brylawski.
For example, Bright has opted for a 13-kilowatt-hour pack, smaller than the battery size most car manufacturers are eyeing for their plug-in hybrid and electric vehicles. Increasing the size to 16 kilowatt-hours could potentially qualify the IDEA for a higher federal tax credit, Brylawski said, but it “would have a cascading effect,” forcing the company to beef up the entire vehicle to handle the increased battery size and weight. The result would be a vehicle that, despite the government subsidy, would cost more to own—due to fuel costs--than the version with a smaller battery pack and more streamlined design.
Plenty of hurdles remain for Bright and its IDEA, however. Amid the current swell of entrepreneurial activity around greener vehicles, "there are going to be a lot of failures," warned Lux Research analyst Jacob Grose,.
Financing has already presented challenges for Bright, which requested $450 million from the Department of Energy in December 2008. When the economic crisis hit, Bright slowed development on the IDEA, shifting gears to selling engineering services. The company also endured a shakeup among its executives, with Munger taking the reins as CEO after Waters stepped down this spring into the role of vice chairman. Said Brylawski, “We’ve kept the lights on for a year and a half by building and developing hardware.”
Bright says it’s now getting back on track to where it left off in 2008, and has scaled back its DOE request to a lower sum it declined to disclose. If approved, the funds would help Bright complete a few more iterations of the IDEA design, launch a pilot program and set up manufacturing. According to Brylawski, Bright needs at least three years to bring the IDEA to market after the project is fully funded. “The loan doesn’t necessarily make or break Bright Automotive,” he explained, “but it’s a key ingredient for the IDEA.”
At the end of the day, Grose argued, Bright will need to win over a large fleet operator who’s looking to make a splash with green marketing claims, or who’s willing to seed plug-in hybrid technology on the bet that it will lead to cost savings down the road.
To Waters, Bright’s IDEA is a matter of “dollars and sense,” and an opportunity to make an impact nationally through small changes for even one customer, if the fleet’s large enough. But for Bright, said Grose, “even if they have the best technology around, it’s a long road ahead.”
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