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Thursday, March 08, 2012

DOE to Carbon Motors: Denied

The Department of Energy has denied Carbon Motors' application for an ATVM loan, which they were going to use to bring to market a purpose built police car running a BMW sourced diesel power train. 

Good decision.

Carbon Motors' business plan was always bizarre to me.  They admitted, up front, that each vehicle would cost around $60,000, and would have negligible resale value because they were intended for government use only.  The idea was that police departments would save money on fuel by running a diesel engine, an therefore recoup the cost of the car, while gaining lots of great law enforcement features.

But developing a whole new platform is expensive, and requires a ton of physical testing, after many thousands of hours of CAE simulations.  When an automaker develops a new platform, development costs can run into the half-billion dollar range, and more, from design to manufacturing. 

And while the program would have generated many U.S. jobs, I think it was probably difficult for the Obama administration to approve a project that sources high-value components from BMW in Germany.

Carbon Motors should have started with a more modest goal, perhaps: retrofitting a proven platform, like the Dodge Charger, with a high efficiency diesel powertrain and whatever custom police tech they wanted to sell.  They would have avoided most of the engineering, while reaping most of the benefits. 

Does the U.S. police market need another interceptor, when Chrysler, Ford, and GM all have proven offerings in this space?  Why would police fleets pick up an unknown and unproven design, with a foreign sourced powertrain requiring BMW tools to repair?

Carbon Motors now has to raise money the old way: convincing private investors that they have a viable product.  I wish them luck, they will need it.

Story here.

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