Electric vehicle (EV) Investments

Electric vehicles (EV) have been a large segment for venture investment the last few quarters. Many governments, including the US, are making major commitments to EV development. At SVB we have also seen a number of startups of the two and four wheel variety, and even a three-wheeler. Some notable financings that are close to home for SVB:

Tesla Motors and Fisker Automotive — $1 billion support from DOE. Two California-based makers of luxury EV cars received a combined $1 billion in loan guaranties from the Department of Energy together with several hundred million dollars of equity. For Tesla, the money will be used to build a production facility for its long awaited "Model S" sedan, which can be had for just under $50,000 (after tax incentives). The Fisker money will be used to fund the completion of development of the plug-in hybrid "Karma," and development and construction of its second vehicle and manufacturing facility.

Tesla announced its plans for an IPO in late January, which comes on the heels of the DOE loan. The recent filing of solar panel manufacturer Solyndra also came after DOE participation - the DOE insists it's not a stock picker! Tesla is currently profitable, but has shipped a bit more than 1,000 cars and the new "Model S" won't deliver until late 2011 at best.

A Better Place — $350 million fresh equity. One of the key challenges facing EVs is infrastructure necessary to support a vehicle with a 200-300 mile range. Even with battery improvements, quick charging is a challenge. A Better Place is developing a battery switching station network to address this need. Think "battery exchange" in the time it would take to fill a gas tank. The money will be used to expand beyond its pilots in Israel, Denmark, and Japan. 

Fun EV fact: there is an estimated 120 million electric bicycles in China and recent coverage suggests the pedestrian dangers of the all-too-quiet e-bikes are spiking traffic accidents.

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