The Truth About Cars » ZAP http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 12 Dec 2014 00:01:32 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » ZAP http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Has the Dept of Energy’s Advanced Technology Vehicle Manufacturing Program Been a Failure? Not Really http://www.thetruthaboutcars.com/2013/05/has-the-dept-of-energys-advanced-technology-vehicle-manufacturing-program-been-a-failure-not-really/ http://www.thetruthaboutcars.com/2013/05/has-the-dept-of-energys-advanced-technology-vehicle-manufacturing-program-been-a-failure-not-really/#comments Sat, 18 May 2013 22:35:38 +0000 http://www.thetruthaboutcars.com/?p=488881 Critics of the current administration have pointed to the impending bankruptcy of Fisker Automotive and the recent suspension of operations at taxi maker Vehicle Production Group as examples of why the government shouldn’t be picking winners and losers in it’s zeal to promote alternative energy. The DoE effort under which those two companies received financing is […]

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Click here to view the embedded video.

Critics of the current administration have pointed to the impending bankruptcy of Fisker Automotive and the recent suspension of operations at taxi maker Vehicle Production Group as examples of why the government shouldn’t be picking winners and losers in it’s zeal to promote alternative energy. The DoE effort under which those two companies received financing is the Advanced Technology Vehicle Manufacturing Program, ATVM. Putting aside political ideologies, contrary to the image given by the apparent failure of Fisker and VPG, the ATVM program actually has a pretty decent track record when it comes to picking winners and losers.

specifications

Revolution Motors

The ATVM was actually started during the Bush administration, in 2007 and received $25 billion funding from Congress in 2008, before President Obama took office, though the final determination of all loans awarded so far has been made by the Obama administration. Only a few loans have been made so far, so it’s easy track the program. In part the small number of loans is because of the political fallout over the 2011 failure of Solyndra, which got over a half billion dollars from the DoE as part of a different program at the DoE. So far less than $9 billion of that $25 billion has been awarded and none since March of 2011, though in the video above, posted in March of 2012, the Department of Energy explicitly was soliciting more companies to apply for loans.

vpgtaxi

Vehicle Production Group

Of the car companies that were actually awarded loans, the DoE did pretty well, three out of five seem to be thriving. Ford was the primary recipient of ATVM loans, $5.9 billion, used to upgrade factories in six states. Nissan came next, with $1.45 billion, used for a battery factory and preparing their Smyrna, Tennessee plant for Leaf production. Tesla, currently flying high with investors and now producing Model S EVs at a rate of 20K/year, got $465 million and has repaid it in full.

coda-ed04

Coda

The status of Ford and Nissan’s debt to the ATVM is unclear, though I presume they are not behind in their payments. Ford has been very aggressive in retiring corporate debt since its turnaround following the mortgaging of the company for something like $23.6 billion in 2006. Of the two failures, Fisker got promised just over a half billion, of which about $200 million was drawn before the DoE put the brakes on after Fisker failed to meet loan criteria, and VPG got the smallest loan, $50 million.

bright-automotive

Bright Automotive

Not only is the ATVM currently batting .600 on moneys disbursed, looking at the companies that have been turned down for loans, the Department of Energy has actually done a even better job picking winners and losers in determining which startup car companies had truly viable business plans.

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Aptera

While it’s true that two out of the three startups funded under the program are failures, assuming that Tesla is indeed a success, those three were the only automotive startups out of 18 that applied were approved for loans. We know about seven of those rejected because they went public with the denial. All seven are pretty much out of business today. Of them, only Coda actually produced real production cars for sale to the public and in their case they only sold about 100 cars. Perhaps if your business model is significantly dependent on government financing, maybe you need a different business model. Tesla has had ample private financing and looks to be viable, but Fisker had over a billion dollars put up by private investors, about six times the amount loaned by taxpayers, and even that wasn’t sufficient.

Xp_vehicle_flowchart_500

XP Vehicles

In addition to Fisker, VPG and Tesla, whose loans were approved, companies that applied for loans and went public with their refusal, were:

Company Loan Request Amount Company Status as of 5/13
Bright Automotive  $450 million  Shut down 2/12
Aptera  $150 million  Shut down 12/11
Coda  $334 million  Filed for bankrupcy 5/13
Think  Withheld under privacy laws  Multiple bankruptcies
Carbon Motors  $310 million  Plant shuttered
Next Auto Works  $342 milion  Factory cancelled in 2011
XP Vehicles  $40  Suing Dept of Energy over claims of political bias
Next-Autoworks-vehicle-spaceframe

Next Autoworks

Actually, a lot more than 7 other companies applied for loans. A Freedom of Information Act request filed in 2009 revealed a list of 108 applicants. So in all, there were only five companies approved for ATVM loans and 103 that were rejected or put on hold. Looking over the FOIA response, I identified another eight automobile startup companies, Zap, Revolution Motors, Electrorides, Wrightspeed, Phoenix Motors, Electric Motors Corp, Environmental Transport Solutions, and Local Motors.

carbon-motors-e7-police-car-1-big

Carbon Motors

Zap has been perpetually troubled, Revolution hasn’t gotten beyond a prototype for their leanable reverse trike, and Electric Motors is out of business. Four of the companies that seem to be surviving, Electrorides, Wrightspeed, Phoenix and Environmental Transport, are concentrating on electrified commercial vehicles, not passenger cars. It look like investing money, private or public, in startup passenger car companies, is not a very good bet.

think-zero-emissions

Think

Rather than being a profligate waste of taxpayers’ money, the  Advanced Technology Vehicle Manufacturing Program appears to have been managed in a responsible manner. The majority of the companies that received funding are in business and appear to be thriving. The majority of startup car companies, which are high risk enterprises in the first place, that were turned down for loans or that had their applications put on hold in 2011, are either no longer in business or financially troubled.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

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Wuxing v.v. Wuling: Fight Of Chinese Van Makers Will Be Felt In America http://www.thetruthaboutcars.com/2012/05/wuxing-v-v-wuling-fight-of-chinese-van-makers-will-be-felt-in-america/ http://www.thetruthaboutcars.com/2012/05/wuxing-v-v-wuling-fight-of-chinese-van-makers-will-be-felt-in-america/#comments Mon, 21 May 2012 12:19:12 +0000 http://www.thetruthaboutcars.com/?p=445352 A fight between two makers of cheap Chinese delivery vans will spill over to America – in more ways than one. China’s Jonway is a small carmaker from Zhejiang Province. Usually known for cheap pickup trucks, Jonway launched the Wuxing onto China’s small van segment. That segment is ruled by Wuling, the company that has […]

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A fight between two makers of cheap Chinese delivery vans will spill over to America – in more ways than one. China’s Jonway is a small carmaker from Zhejiang Province. Usually known for cheap pickup trucks, Jonway launched the Wuxing onto China’s small van segment. That segment is ruled by Wuling, the company that has a joint venture with GM. Jonway is also ruled by an American company: Californian ZAP bought 51 percent of Zhejiang Jonway Automobile Co. Ltd. in 2011.

Wuling’s cheap breadvans rule a hot, but recently beleaguered segment in China. Wuling  Sunshine minivan was China’s most-popular vehicle last year. At 33,000 yuan ($5,215) list, the car does not make much money for GM, if any at all. “GM does not rely on the minibus for profit,” said Jenny Gu, a Shanghai-based analyst with industry researcher JD Power & Associates. “They only contribute volume.” It was that volume that helped GM dethrone Toyota last year.

Yonway wants a share of this market, and the company is not subtle about it. Says Carnewschina:

“Jonway choose Wuxing on purpose, it almost sounds the same in Chinese as Wuling and it almost means the same. Wuxing means ‘Five Stars’, Wuling means ‘Five (sharp) Squares’.”

Jonway will sell its Wuxing from 37,800 yuan on up. Last year however, Wuling dropped the price of its already cheap Sunshine to 28,000 yuan ($4,424). The segment as a whole is under pressure, the entry of new competitors with similar names is likely to spark price fights. Losing $100 per van does not sound like much, but if you sell more a million of them …

Be prepared to see the Wuxing closer to home. ZAP says that the Wuxing will be sold in the U.S. as the Shuttle G, a plug-in version will be sold as the Shuttle EV.

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ZAP Still Alive, Alias Still Coming (Or Not) http://www.thetruthaboutcars.com/2011/10/zap-still-alive/ http://www.thetruthaboutcars.com/2011/10/zap-still-alive/#comments Sat, 22 Oct 2011 18:52:03 +0000 http://www.thetruthaboutcars.com/?p=415613 One of the earliest iterations of the “Low Speed Vehicle Today, World EV Domination Tomorrow” business model to emerge at the dawn of the electric car era was ZAP. But after being exposed on numerous occasions for its poor product quality, vaporware hype and stock manipulation (most infamously in this Wired story), ZAP disappeared from the EV […]

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One of the earliest iterations of the “Low Speed Vehicle Today, World EV Domination Tomorrow” business model to emerge at the dawn of the electric car era was ZAP. But after being exposed on numerous occasions for its poor product quality, vaporware hype and stock manipulation (most infamously in this Wired story), ZAP disappeared from the EV scene in the US (the company’s official (read: sanitized) history can be found here). Last we heard, ZAP was hyping a venture with the Korean optics firm Samyang, but it seems the firm has spending the last year or so putting down roots in the Chinese market. Having merged with Jonway, the Chinese maker of scooters, ATVs and a CUV that looks suspiciously like the Toyota RAV4, ZAP came back to the US for the Automotive X-Prize, which it contested in a ZAP Alias, the three-wheeled, $38k vehicle that has not been produced in volume although the company is still accepting deposits for it. The Alias failed to finish in the X-Prize, but ZAP says that revenue from Jonway is funding the vehicle’s continued development (including a four-wheeled version)… which was supposed to debut way back in 2009.

Now Consumer Reports says the firm is focusing on selling electric RAV4 knockoffs produced by Jonway as it continues to work on the Alias. But the firm seems to have burnt too many bridges in the US, as it says it will focus on selling the EVs in China and other world markets… despite the fact that developing market EV sales are going nowhere.  But ZAP has left something of a legacy in the US: Senator Mitch McConnell, a critic of government loans for Solyndra, apparently pushed for a quarter-billion dollar federal loan to ZAP, opening him to charges of hypocrisy. Now, as ever, ZAP remains a fascinating fixture at the margins of the EV scene. And though it’s an interesting company to watch, it’s best when viewed from a safe distance…

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Quote Of The Day: A Sucker Born Every Minute Edition http://www.thetruthaboutcars.com/2010/02/quote-of-the-day-a-sucker-born-every-minute-edition/ http://www.thetruthaboutcars.com/2010/02/quote-of-the-day-a-sucker-born-every-minute-edition/#comments Fri, 05 Feb 2010 16:10:57 +0000 http://www.thetruthaboutcars.com/?p=344340 Does Tesla’s S-1 SEC filing leave you worried about the state of EV startups? The great thing about the seamy underbelly of the EV industry is that there’s always a shadier prospect out there to make even marginal cases like Tesla look good. Our perennial favorite in the EV vapor game is ZAP, the erstwhile […]

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Does Tesla’s S-1 SEC filing leave you worried about the state of EV startups? The great thing about the seamy underbelly of the EV industry is that there’s always a shadier prospect out there to make even marginal cases like Tesla look good. Our perennial favorite in the EV vapor game is ZAP, the erstwhile maker of the Xebra EV (interestingly, the Xebra still shows up on ZAP’s webpage). Zap’s latest play in its never-ending quest for press-release fodder: a tie-up with (get this) a South Korean optics company, best known for its camera lenses and closed circuit TV security systems. Because sometimes you have to cross an ocean to find a sucker big enough to say things like:

Samyang decided to partner with ZAP because of its extensive industry knowledge in electric vehicle production and the breadth and maturity of its current line of electric vehicles

Oh dear.

According to ZAP’s latest 8-K filing:

ZAP and Samyang entered into an Investment Agreement pursuant to which Samyang agreed to invest $3 million in convertible notes of ZAP (the “Samyang Investment”) and ZAP agreed to invest $2 million in convertible bonds of Samyang (the “ZAP Investment”).

A previous filing reveals that ZAP:

entered into a distribution agreement with Samyang Optics Co. Ltd of South Korea for the exclusive rights to manufacture, assemble and market ZAP’s complete line of electric trucks, vans, motorcycles, scooters and ATVs in Korea.

This partnership is part of Samyang’s broader strategic plan to enhance its core business with a new thrust into cleantech, focusing on Korea’s increasing market opportunities in electric vehicles. The agreement establishes Samyang as ZAP’s exclusive distributor and assembly partner, leading to potentially manufacturing its electric vehicles in Korea.  The distribution agreement commits Samyang to set up manufacturing facilities and distribution hubs in Korea with annual procurement quotas. The electric vehicle bodies will be produced by ZAP’s recently announced manufacturing partner, Zhejiang Jonway Automobile Co. Ltd, and uses the electric power train technology and engineering designed by ZAP and produced by ZAP Hangzhou, the joint venture between ZAP, Holley Group and Better World International.
Other recent SEC disclosures include the departure of ZAP’s auditors, a Chinese joint venture, and a damning 10-Q that shows a $2.9m operating loss in the first three quarters of 2009, $6m+ in new stock issuance cash flow and cash on hand of just $5.3m.
All of a sudden, Tesla looks like a solid investment by comparison.

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