United States: Key Federal Transportation Innovation Initiatives: What, When, And Why?

Nathaniel Kron is Sr Public Affairs Advisor and Taite McDonald is Sr Policy Advisor in the Washington D.C. office.

Over the past year, the federal government has released numerous initiatives and announcements aimed at facilitating transportation innovation. Such initiatives range from a proposed $4B toward the development and deployment of autonomous vehicle technologies to updated guidance for autonomous vehicles released late last month. While it is evident that the federal government seeks to play a key role in transportation innovation, the appropriate avenues for stakeholder participation and collaboration are less evident.  However, it is important for industry and key stakeholders to understand that their participation across seemingly disparate agencies and programs can be enormously beneficial, if not critical, to the successful deployment of these initiatives. The summary below provides a brief overview of a few of the recent initiatives, next steps to participate, and what to expect in 2017.

U.S. DOT Autonomous Vehicle Guidance

Overview

The U.S. Department of Transportation (DOT), through the National Highway Traffic Safety Administration (NHTSA), recently released guidelines for autonomous vehicles. The new driverless vehicle guidelines stop short of official regulations, but the guidance is the most potentially impactful federal government action in the space to date since it is likely to lead to future legislative, regulatory, and enforcement action. Accordingly, it's critical for technology and government stakeholders to review the guidelines and comment on the section(s) relevant to their business.

Subsequently, DOT expects to issue the first revised policy sometime next year, and at roughly annual intervals after that. Key congressional committees overseeing autonomous vehicle policy are the Senate Committee on Commerce, Science, and Transportation and the House Transportation and Infrastructure Committee. Congress's overall approach at this time is to avoid overregulation and a patchwork of state regulations. However, Congress will inevitably need to become involved given the current limitations of DOT authority. 

In addition to technology development, the emphasis of Congressional oversight will be an emphasis on the appropriate amount of regulation pertaining to safety.  More broadly, new regulations have the ability to affect manufacturer liability, design standards, and insurance coverage, among other issues.

Next Steps

NHTSA's request for comment on the guidelines will be open for 60 days.  NHTSA hopes to receive comments on the guidance from technology providers, manufacturers, consortiums and other governing bodies to refine and improve the guidelines in an efficient and expeditious manner.  Stakeholders should note that comments do not need to be extensive or comprehensive, but nonetheless it is important to submit pertinent feedback. 

Advanced Transportation Technology Deployment Funding at DOT

Overview

In January, DOT announced that it proposed spending of $4B over ten years to accelerate the development and adoption of safe vehicle automation through real-world pilot projects. As of this writing, plans to approve and deploy that funding are not yet realized. However, NHTSA's budget requests $200M in 2017 for the proposed Autonomous Vehicle Pilot Program. Also, NHTSA requests $56M for an Alternative Fuels, Electronics, and Emerging Technologies program to conduct research and testing in support of the safe deployment and operation of autonomous vehicles.

As companies wait for these proposed programs to develop, some existing DOT programs can fund deployments of innovative technology, including autonomous vehicles. These include the Advanced Transportation and Congestion Management Technologies Deployment Initiative (ATCMTD) as well as DOT's "Smart Cities" Initiative, which will invest over $160M in federal research and leverage more than 25 new technology collaborations.

Next Steps

While the Smart Cities Challenge has been awarded to Columbus, Ohio and the program has no plans at this time to seek new applicants, other potential funding remains available. The Fixing America's Surface Transportation Act (FAST Act) established the ATCMTD with funding of $60M per year through 2020. DOT released the first solicitation in March 2016 and expects to announce awards in 2016. We expect a new release in a similar time frame in 2017. While only state or local governments, transit agencies, or metropolitan planning organizations (MPO) are directly eligible, partnerships with business and technology providers are encouraged; thus, companies seeking to access this funding should begin forming state and local government partnerships that align with their technology deployment goals in advance of the solicitation release next year. More broadly, although the exact program structure has yet to be finalized pending the approval of appropriations bills for FY17, both the House and Senate appropriations reports contain language supporting the development, deployment, and oversight of autonomous vehicles. Stakeholders will have greater clarity after the approval of the federal budget.

Transportation Funding Developments in the DOE Loan Guarantee Program

Overview

In July, the Department of Energy (DOE) held a Sustainable Transportation Summit, where the DOE Loan Program Office (LPO) issued a supplement to its Title XVII Renewable Energy and Efficient Energy (REEE) Projects Solicitation. The supplement clarifies that certain electric vehicle (EV) charging facilities – including associated hardware and software – are now an eligible technology under the solicitation.

Although not discussed as part of the Summit, LPO's Advanced Technology Vehicles Manufacturing (ATVM) loan program still has $16B in low-cost financing authority that has the potential to aid developers of autonomous vehicles.  LPO officials are currently evaluating whether autonomous vehicle projects are eligible under program rules. To be eligible under the ATVM loan program, a light-duty vehicle or components must contribute to a 25% improvement in fuel economy over a 2005 model year baseline.

Under both DOE loan programs, LPO officials continue to operate in a conservative manner and place significant emphasis on contracted revenue streams to support repayment of project debt. As a result, technology developers will want to think creatively about project structure and ways to firm up off-take agreements to meet DOE's standards.

Next Steps

Interested applicants should review the ATVM and REEE program rules and solicitation guidance to evaluate their eligibility, project plan, and the likelihood of success. LPO encourages applicants under either program to discuss potential projects with them before embarking on an application. Most notably, companies should think carefully about revenue streams and risk mitigation strategies to present the most compelling case to DOE from the outset and then begin to craft an application.

Outlook for the DOE Vehicle Technologies Office

Overview

The DOE Vehicle Technologies Office (VTO) supports the development and deployment of advanced vehicle technologies including advances in electric vehicles, engine efficiency, and lightweight materials. Key proposed initiatives for the coming year include:

  • Electric Drive Technologies R&D: VTO plans that an Electric Drive Technologies Development funding opportunity announcement (FOA) topic in FY 2017 will develop integrated electric drive systems that can achieve performance and cost targets with improved reliability and power density. In addition, an Electric Drive Technologies Research FOA topic in FY 2017 will develop advanced materials and technologies for Wide Bandgap (WBG) packages and power module designs to accelerate power. These topics are part of a $39M budget request, and VTO expects to select 3-4 projects. 
  • Battery Technology R&D: VTO expects to choose eight new competitively-selected awards for advanced battery materials research to capitalize on recent beyond lithium ion advances and novel electrolyte concepts. The focus will be on the following: mesoscale heterogeneous electrolytes, organic/inorganic nano-composites, and interface-augmented ionconductors. Further, VTO plans to choose up to six new FOA awards to build on the successes of an FY 2013 FOA entitled "Improvements in Cell Chemistry, Composition, and Processing." This grant funding would come from a $130M request.

In addition to this planned funding, VTO typically issues a program-wide FOA with a broader array of topics and an "open" category. This solicitation is typically released in June depending on the agency's budget situation.

Next Steps

Companies with projects that align with VTO's proposed funding for 2017 should explore meeting with VTO officials to gain further insights into topic areas and funding amounts. Companies whose potential projects do not align with DOE's current stated FOA topics should still examine how they may be able to compete in a program-wide funding announcement and align with VTO goals to further their company's technology development efforts.

Given the complexity and evolving nature of these programs, if stakeholders have questions, H&K's Government Energy Finance team and broader Public Policy and Regulation group can assist. Collectively, H&K is working on numerous aspects of transportation innovation initiatives and we are happy to provide further insights to stakeholders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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