UK electric van maker announces US joint venture and gets $39m support for US sales
Thu 06 August 2009
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Modec, the Coventry-based electric van company, is to receive a $39m grant from the US government via US joint-venture partner Navistar to sell electric vans in the United States. President Barack Obama announced the grant support as a means of stimulating low carbon van production in the US.
Modec - which has been established by Lord Jamie Borwick, a LowCVP board member - is setting up a joint venture with Navistar, a big US commercial vehicle maker, to produce and sell the electric vans.
US government funding for the joint venture between Navistar and Modec is part of a $2.4bn aid package for electric vehicle production. (See below.)
Electric trucks closely based on Modec's UK model are thought likely to be manufactured at Navistar's plant in Elkhart, Indiana.
The Financial Times reports that Modec also hopes to increase the number of employees in the recession-hit Midlands auto sector if, as the company hopes, European production rises from 100 vehicles in 2008 to several thousand a year.
Modec's UK customers include Tesco, UPS and Fedex. The Navistar deal will secure the future for Modec according to Bill Gillespie, the company's chief executive.
The Modec development is a part of President Obama's plans to make $2.4m available in grants to stimulate domestic production of electric cars and to help reduce oil imports and cut greenhouse gas emissions.
The LA Times reports that the funding comes as a part of the nearly $800-billion economic stimulus bill which Congress passed earlier this year.
The President has repeatedly expressed his support for the introduction of electric cars, both in order to help revive the flagging domestic car industry and to advance his environmental goals.
The grants will aim to help some U.S. companies clear some of the major hurdles in the path of widespread plug-in vehicle deployment. Most of the money - $1.5 billion - will go toward the production of advanced batteries to allow electric cars to drive long distances on a single charge. An additional $500 million is to fund drive-trains for electric cars, and $400 million is to purchase and support thousands of electric vehicles to serve as demonstration models.
The LA Times separately reported that GM is to receive the largest share of the new funding with $400m earmarked to help with the development and production of GM's Volt plug-in electric hybrid.
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