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The most significant obstacle to the widespread use of carbon-fiber-based composites by the automotive industry is the high cost of carbon fibers in comparison to other potential structural materials. Carbon fibers are currently produced by thermal pyrolysis of a polyacrylonitrile (PAN) precursor to obtain the desired properties. The most significant cost factors in the process are the high cost of precursors and the high capital equipment and energy costs in conversion to carbon fiber. The Department of Energy is supporting developmental efforts to reduce costs in both precursor production and conversion areas. This paper describes developments in the conversion process. Because of the unsuccessful results of manufacturing carbon fibers through their direct heating with microwave radiation (variable frequency microwave [VFM] and single frequency microwave [SFM] energy), new avenues were explored for this processing.