General Motors will pour $5 million into a plug-in hybrid commercial van being developed by an Indiana firm, the automaker said on August 3.
The IDEA van will be able to drive up to 40 miles on its electric battery before switching over to a hybrid gas-electric engine which offers a fuel economy of 36 miles per gallon.
"It's an opportunity to bring more efficient, greener utility to the country's commercial and government fleets and to do it in a way that they save money," said Reuben Munger, CEO, Bright Automotive.
Most light-duty commercial vans get fewer than 15 miles to the gallon and are driven an average of 25,000 miles a year, Bright said. The IDEA would save the average customer about 1,500 gallons of fuel per year.
The IDEA is expected to hit U.S. showrooms by 2014 and is also being aimed at the European market, Munger said.
GM's investment will help Bright accelerate production of the IDEA, which stalled after financing dried up following the 2008 financial crisis, Munger said.
GM will also share its technology and the IDEA will run on a GM engine.
The light-duty commercial van market -- which includes government fleets and businesses such as cable and telephone companies, florists, and plumbers -- represents about 900,000 vehicle sales a year in the United States, Munger said.
Bright plans on building a plant with a production capacity of 50,000 vehicles in the United States.
"The European market is twice as large as here in the U.S. and the average retail price of the vehicles are materially higher, as are gas prices so the economics work extremely well in Europe," said Michael Brylawski vice president of corporate strategy for Bright.
"But our core business plan is based around a 50,000 unit run-rate volume."
The IDEA is the first investment made by the newly formed General Motors Ventures LLC. "Funding early-stage start-up companies is a new way of doing business at GM to accelerate the introduction of innovative technology to support our core automotive business and give us a competitive advantage," said Jon Lauckner, president of GM Ventures.
GM has not yet determined how the IDEA will fit into its product portfolio, he added.
Copyright Agence France-Presse, 2010