AutoblogGreen: I'm talking with Neal Anderson from the Automotive X-Prize and why don't we start off, Neal, tell us a little bit about the background of the X-Prize Foundation, the Automotive X-Prize and your involvement in that.
Neal Anderson: You bet. The X-Prize Foundation started back in '96 and Peter Diamandis, the founder and chairman of the X-Prize Foundation had a vision of opening up the space industry and breaking it out of the government's hold on it and opening up private space flight. So he launched the Ansari X-Prize back in '96. That prize was awarded in 2004 to Burt Rutan and Paul Allen who won the Ansari X-Prize, a $10 million prize, which had a tremendous impact on the industry. Richard Branson of Virgin, now Galactic bought the winning technology and you can get tickets as a space for a couple hundred thousand dollars a pop. And you're starting to see more than six or seven companies that are vying to the first to space with the technology that he was inspired by that prize. Plus lots of media attention too and one of the great things about the prizes is that you really offer a lot of leverage to investors. So for a $10 million prize there were twenty-six teams from seven countries that invested quite a bit of money. I believe it was $100 million to try to win the prize and then we had Branson spending $120 million afterwards to buy the winning technology. A little bit of money can really spur a lot of investment. The idea for the X-Prize Foundation was spawned by Charles Lindbergh and his pursuit of the Orteig Prize, which a lot of people don't know that Lindbergh flew across the Atlantic to try to win a $25,000.00 prize and that really – after he did that that opened up the aviation industry tremendously. That's a little background on the, on the X-Prize Foundation. In the wake of the success of the Ansari X-Prize, lots of individuals challenged Peter to broaden the scope of the X-Prize model to focus beyond space and kind of bring this X-Prize model up to areas of energy, education, healthcare and things of that nature. So the Automotive X-Prize is the third X-Prize that's focused on energy, we launched a prize that's focused on healthcare in the genomics field late last year. So the Automotive X-Prize is really – our focus is to to inspire a new generation of super efficient vehicles that help break our addiction to oil and stem the effects of climate change. So we're using the same model to help break open the bottleneck of innovation that's happening in the automotive industry, to try see a whole new generation of viable, production capable super efficient vehicles come out of this competition.
Continue reading the rest of our discussion after the jump
ABG: What's the current status of the Automotive X-Prize program?
NA: We just a couple of days ago released our draft competition guidelines for public comment. And the guidelines are a product of a year's worth of work and collaboration from hundreds if not thousands of expert advisors that form an advisory panel. We've looked very hard in this industry, at all of the, the key constituents that have a stake in it and have tried to come up with a fair set of rules that are technology neutral, fuel neutral and offer a level and balanced playing field for all competitors to come in and try to win this prize. The competition guidelines outline a few things. First, we're looking for a viable business. That's one of the key definitions here. There are other competitions like the Eco-marathon and Challenge Bibendum that offer or try to inspire technological breakthroughs but they're more aimed at, at research and development. What we're looking for is technology that can actually meet the market in packages that consumers want to buy.
ABG: And how will you judge what's a viable vehicle and something that's producible and marketable?
NA: That's a great question. We're, we're going to judge production capability according to safety, cost, features of the vehicle and the business plan. So essentially every team will have to provide a plan that shows that their vehicle is designed to be safe in its intended market, so legally driveable. The cost has to show that there is a market for 10,000 units a year. So we're going to look at historical price models and, and make sure whatever that vehicle plan is, if the cost fits within that band of price range that consumers show they are willing to pay to support 10,000 models a year and we're going to allow that in. The features, they have to have all the features that consumers demand from vehicles. So this is really a consumer based formula to make sure that we're getting cars that people want to buy. Then last but not least they have to have a business plan to show that they understand what it takes to make, sell and service the vehicle.
ABG: Clearly building a one-off vehicle to show at car shows and in competitions is one thing. But to actually create a vehicle that can be produced in a cost-effective manner is something else entirely and also be reliable and durable enough to meet customer expectations. That's definitely been an issue up until now with a lot of the electric vehicles that have come to market. They're clearly designed more as garage projects. There are a certain group of people who are willing to accept that and live with that. But that's not something that most people are going to be able to put up with.
NA: No, most people don't want to void the manufacturer warranty when they make the conversion or go to a plug-in hybrid or whatever it is. A further test of all these vehicles is what I just described is how vehicles qualify to race. We have these two races that are staged sort of bookending 2009, a qualification race and a grand prize race. And they're really tests of real world driving conditions that reflect consumer driving patterns. So city start, stop, idle, long distance, hill climb. Imagine a Tour de France for vehicles. But we're really going to test these vehicles in ways that consumers understand and show their actual mileage, their actual fuel economy. We're also tracking the carbon output of vehicles from a wheels to wheels perspective and tailpipe conditions. But the main target is fuel economy for 100 miles per gallon or its equivalent, since you spoke about electrics. What that means is we're taking 100 miles per gallon, the energy that's in a gallon of gas, we're equating all of the fuels to that standard and so no matter if you use biofuel, electricity or hydrogen, whatever fuel you're using, the 100 miles per gallon measure is meant to take all these fuels and put them in metrics that are understandable for your average consumer.
ABG: I understand that there's two classes for the competition. Can you tell me a bit about those and what the differences are and will there actually be two prizes or just one overall prize? How is that going to work?
NA: So you're right, we have two classes. We have a mainstream class, which is four or more wheels and has to seat four or more passengers and really is designed to hit the center of the market. These are the vehicles that are most likely going to come in packages that consumers expect. Then we have an alternative class, which has no minimum wheel requirement but a minimum of two passengers. They all have to meet basic safety standards and the same fuel economy requirements. But those two classes we think are, are important. The alternative class really focuses on the idea of what a vehicle is and allows competitors to push that idea forward. We're going to split the prize between the two classes. The total prize purse hasn't been determined yet, but we should be able to announce that soon. Three quarters of the prize will go to the mainstream class and a quarter of the prize will go to the alternative class. We feel that the emphasis needs to be placed on the heart of the market. We want to support innovation in terms of vehicle design in terms of the alternatives.
ABG: So as far as drive trains and vehicle design it's pretty much wide open, whatever anybody can come up with the goal of getting the most efficient design?
NA: That's exactly right. I mean, as long as you have something that can be built and doesn't have unobtainable materials and things of that nature, as long as we have something that can be built in mass, 10,000 units a year that resonates with consumers, you're welcome to enter.
ABG: And who's going to judge the vehicles?
NA: We have a number of advisors right now. Organizations like Department of Energy, like the Environmental Protection Agency, Department of Transportation, NHTSA would be involved. Other organizations that really understand the industry we're targeting like AAA or JD Power or Consumer Reports, Society of Automotive Engineers is an important one. All of these groups are not confirmed but we're talking to them and they've been helping us with the rules. We'll also have experts from the industry that are current executives or retired executives that are assisting us and making sure that this is a fair and equitable competition.
ABG: As far as the rules go right now, is it the same types of groups involved in drafting the rules?
NA: Yeah. As a matter of fact, if you go to our web site at auto.XPrize.org you can download the draft competition rules. You'll see in there a list of the prize development advisors and working groups that have helped us draft these competition guidelines. Literally it's been a cast of thousands from every sector; from the regulatory sector, from the automotive industry itself, large manufacturers down to entrepreneurs, the environmental community, the scientific community. You name it, they've all had a voice in creation of the rules. We've now released them to the public. They're at a point now that we're soliciting feedback in order to finalize them and there's a 60 day open comment period where we're looking for feedback from everyone that has a stake in this or is interested, consumer or engineers, whatever it is to help fire harden these rules and make sure they're right because we only have one opportunity to the rules right.
ABG: Once you finalize the rules later this year essentially anybody can put together a team and, and enter the competition?
NA: That's right. We have a modest registration fee, which is not finalized yet but will probably be around the neighborhood of $5,000.00. It's really about making sure you hit the qualifications. If you're a garage inventor or large automobile manufacturer, as long as you can prove that you have a viable plan to get cars on the road that are super efficient and clean we want you to compete.
ABG: Once a team is registered, is there anything else between that time and the first part of 2009 when you run the first qualification race?
NA: Yes. So as we hope to launch this prize later in the year details haven't been set yet. But in between registration and the races there will be the qualification gates that we went over before. So they have to get their plans in to show that they meet cost, safety, features and business viability requirements. We also have a number of networking events where teams get together with investors and suppliers and engineers, designers where, where if they have holes they need to fill, we really want to support their efforts.
ABG: Sort of a peer process as you go along?
NA: That, and also getting folks together to really cross-polinate and let teams emerge as they are so they'll be able to fill holes that they don't have, if they need certain parts that they're not able to find on their own we want to help facilitate those relationships. If they need investment capital we want to be sure that they have access to folks, if they have the right plan and somebody wants to invest, those types of things. We're also planning before 2009 to do a road show which brings these vehicles out across the country to the public where they can actually see and feel these things and really get an idea of what's coming out of this competition.
ABG: And when the races happen are those going to be here in the United States or are they going to be in different parts of the world or...
NA: We haven't finalized the locations for the races. We want to expose these vehicles to as many people as possible. So we'd love to do a coast to coast race in the United States. It's possible that we may have some stages overseas.
ABG: Is there anything else that you'd like to share about the program? It sounds really exciting. It sounds like it could generate some real interesting innovations.
NA: I appreciate that. We're really excited that we're at a stage where we can share our draft competition rules. We want to get their feedback. We want to hear from everybody that is interested in this and we hope to build toward a very exciting, stimulating competition where there is truly a new generation of super efficient vehicles available to consumers that they can actually go out and buy in the near future.
ABG: Great. I'm looking forward to seeing some of the first plans and seeing and participating in some of these preliminary events and taking a look at what people are coming up with. It sounds like there's going to be some exciting stuff happening.
NA: Absolutely. We'd love to have you as part of the process any time.
ABG: Thanks a lot, Neal, I appreciate it.