Electric Vehicles

Saturday, August 02, 2008

What is going on with people investing in Electric Car companies?

We, www.EcoVElectric.com , are an electric car company and have not found any interest on the part of private investors, yet others are getting significant money. What is going on?

Who seems to be getting investment money and from where? Silicon Valley has put a $150M into Tesla and Tesla is struggling to build vehicles and are over a year late. So what?
Aptera just got $24M round C funding and Google.org’s RechargeIT program was a small part of this.

Think is working with $76M of funding out of Silicon Valley, too.

Phoenix is still in trouble and still trying to climb out of a hole.

Miles still has a long way to go and they really don’t know where they are either. There is a reason China is slow coming to the US. Miles may not even understand this. Again cars are not in their business experience.

Zenn is struggling and you can go to their financials and see they are selling less than 400 vehicles per quarter. Don’t know what the future holds for them.

And there are others. It does not take a rocket scientist to see the EV opportunity out there and it is growing. It is like 1990’s all over again. EV companies popping up all over, but few survived. Most again were very short on automotive fundamentals.

Do these companies have what it takes to be successful? Success is different for different people. Why are VC’s investing in these companies? It is not for a long term investment; it is all about pumping up the “value” of the company and then introducing “production” vehicles to the market and selling out after the IPO. Then will the companies survive? I believe they will not. Not without the key automotive based disciplines a world class company needs. These companies will be sold based on emotionalism, enthusiasm, and lots of hope and frustration about the World today. The VC’s will be all smiles as they reap great sums of money from an unknowing and unsuspecting public. Most of these companies are very weak on automotive understanding including design, engineering, test and validation. Most can’t wait to learn or do the proper testing. Most will probably end up in severe financial trouble within a couple of years of selling these untested battery systems they are going to use. They will potentially slowly die and disappear. People will be bitter and complain of a conspiracy against EV’s but it is so much more than that.

I worked on the GM EV1 and saw the problems a very large and wealthy corporation can get themselves into. No start up can spend $1,000,000,000 to build 1000 vehicles and then call them all back and crush them. Why did this happen? In addition to all the usual suspects presented in “Who Killed the Electric Car,” GM had other major issues they could not overcome. They pissed off their supply base by having many of the suppliers amortize GM’s tooling costs over unrealistic volumes and then GM shut the program down after building about a 1000 cars. GM never guarantees anything in their contracts. As we used to say in the Tier 1 supplier business, which I joined after GM, “the only thing worse than doing business with GM is not doing business with GM.” So what was the problem? GM did not do enough testing on EV1 and they sort of knew that. (Their lead acid batteries were no good and the Ovonic’s NiMH batteries were $40,000 a pack and those batteries were not very good either! Toyota with Panasonic had them both right. How did GM fix the S10 EV’s? They put in Panasonic lead acid batteries. How did Ford fix the Ranger EV’s, they took out the 8V GM lead acid EV batteries and put in Panasonic NiMH. Toyota and Panasonic did the proper testing and took the proper time to do it.) But then GM eliminated their supplier base, many of who would never build GM another EV1 production or service part ever again. GM had no option but to recall and crush the EV1’s. Bottomline, GM could afford to do this with their huge budgets. No small company will know all of this and know how to solve it, without extensive automotive experience. People from the software industry will take years and years to learn what they need. People from the sales and marketing side, don’t even know what they don’t know about automotive. It will probably kill them and their companies. Do the early VC investors care? No they don’t as long as they can get their money out before the deck of cards falls.

So what is EcoV’s problem? We don’t have the above issues because we are strongly trained and experience in automotive. We have done high and low volume production. We have done testing and validation. We have done the design, engineering and development of automobiles. We have done electric vehicles at the OEM’s. We have the people with experience from the Board Room to the show room. We know how to integrate customer needs with a low cost flexible product design, integrate supplier base, and integrate all the processes to develop, market, sell and service EcoV. These are all things a vehicle company must have.

But we are not sexy. We are not known by past accomplishments. We don’t have powerful investors on our side promoting us to their wealthy friends where everyone is after a quick buck. We are a company on a mission to provide a needed product that we know both fleets and the public wants and needs. We are trying to set up a sustainable business with a focus on still being around serving our customers in 50 years. With a 50 year survival plan you do things differently today than if you do if you have a 3 year plan to get in, pump it up, and get out. We are in it for the long haul not a short flash in the pan. So if these are things you are concerned about and consider important, we need to know and talk!
Do we need and want all of the above companies to be successful? Yes we do! We hope they will be. But they need to get a lot smarter, a lot quicker.

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4 Comments:

  • I hope you succeed but you need to have a look at your product page. Then look at Aptera and Tesla. A 35 mph EV fits into the "penalty vehicle" definition. Plus I could see nothing on your website about range or time between charges or cycle life of batteries. Tesla markets in the sex-money-power zone and is "green". Aptera is super efficient 0.11 Cd, 1400 lb composite, ev that gets 120 miles from it's 10kWh LiFePO batt. The low drag and low weight allow lower cost due to smaller battery ( 80 Wh/mi is tough to beat ) these two cos are smart, exciting designers. Are you?

    By Blogger tlnrc, at 10:17 AM  

  • Anyone who thinks that GM could have succeeded with an EV priogram needs to have their head examined.
    NOBODY wanted crappy electric car snback then, and even now with $4 gasoline, they make zero economic sense, and are anything but zero emission vehicles, regarless of what brainless California politicians claim. Since GM didn't have any demand for the cars, the idea that its suppliers would keep their production lines open is absurd - regardless of anything GM did or didn't do, or whow they treated them. The entire argument is ridiculous - and you notice that Toyota crushed a lot of their Rav4 Eelectrics as well
    (Chris Paine made a deal with Toyota not to make them villains, despite the fact that both they and Hionda had killed their EV programs just exactly like GM did). The movie is fictitious Hollywood propaganda.

    By Blogger Bike, at 10:55 AM  

  • I placed an order for an Aptera because they have proposed to build a car that fits my needs for commuting. The vehicles mentioned on your web site do not fit my needs, because they are low-speed vehicles. The Aptera has sufficient range and top speed to commute on the freeway in California.

    I would have ordered a Tesla, except that it wouldn't fulfill the requirements for a weekend getaway car due to limited range and limited trunk space. I'm keeping my Boxster for that.

    If you are unhappy with the investment interest you are getting, then perhaps you should reassess your market or strategy.

    Full disclosure: I work for Google, but I have nothing to do with their investment strategies. I just want a car that suits my needs.

    By Blogger Kevin McCurley, at 11:25 PM  

  • Thank you for your comments. Let me predict that neither Tesla or Aptera will survive long term. Yes they have done some interesting things but do they have the experience to put a vehicle into low volume mass production? I do not think so.
    Yes Tesla is sexy, but they have put their first 100 customers who paid $100,000 cash up front still waiting after 2 years with delays after delays. If you read Eberhard's blog it only gets worse from the inside.
    Aptera is a three wheel motorcycle. Do they have the necessary skill set for automotive? I don't think so. Will they succeed? Only time will tell. I do not believe all that I read. 80 Wh/mile is extremely difficult if not impossible to do. It may be possible but is probably not measured only predicted. Just turn on your lights, your fan, your radio, your defroster and there goes your 80 Wh/mile. They will not deliver that in production, if they make it to production.
    It more than just building product, it is about a sustainable company that is profitable with a well tested reliable product and not just a flash in the pan.
    Yes, EcoV is a niche product for a niche market to be produced in niche volumes. People need to step back and look at a large view of the transportation world. Not everyone and every product needs to go fast and go far.
    An EcoV parking enforcement vehicle or EcoV mail carrier vehicle are very low cost to operate and own. EcoV passenger version for people in planned communities make a lot of sense. EcoV goes 25-40 miles on a 50 cent charge, charges in 8 hrs or less and can be opportunity charged when ever there is a standard wall outlet. If you need more we have a 60 mile range battery or can provide a series hybrid system using propane that allows you to be able to charge anywhere anytime. The cost of replacement pack is about $1,200 and very easily done. The pack should last 6,000 to even 10,000 miles. We will be looking at Li batteries but it will be 5 years or more before these are commerically available.
    What will a Tesla or Aptera battery pack cost to replace, particularly if they go out of business?

    By Blogger Rich Marks, at 1:04 PM  

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