Zap Pulls The Plug On Xebra EV, But Not On Stock Shenanigans

Paul Niedermeyer
by Paul Niedermeyer
zap pulls the plug on xebra ev but not on stock shenanigans

Did you think Zap would issue a press release announcing the death of the Xebra? Those are strictly reserved to keep their perpetual motion machine of stock hyping going. No worries; despite perpetual losses ($132 million to date), their executive self-enrichment machine continues. Sales in the dumps? Still no worry; there’s always a new investor around the corner to buy their “today, ZAP is continuing its focus as one of the pioneers of advanced transportation technologies and leveraging its place in the market as a magnet for new technologies” line. As a consequence of our mucking around in their mandatory 10-Q report, we can tell you that the flagship of their EV fleet, the miserable golf-cart technology three-wheeled Xebra, is no more. Is the long-anticipated and endlessly delayed Alias next? And even the whole company?

My review of the Xebra, the only ever undertaken by a major automotive site, was somewhat worse than scathing. And before the counter broke, it was vying with Lieberman’s RS4 review for the highest number of views of any TTAC review. Explain that, if you can. If Jonny’s review helped make a career, perhaps mine helped put the Xebra out of our collective misery. I’m less popular with ex-Xebra dealers than another (inevitable) burnt out battery pack. Or perhaps Wired magazine, because of their highly unflattering corporate expose.

Enough schadenfreude and on to the salient facts: buried in Zap’s latest 10-Q filing is this tidbit: “The decrease of $1.5 million (in revenue) is primarily due to the phase out of our three wheeled Xebra vehicle with reduced selling prices.” But that’s not all:

Research and development expenses decreased by $57,000 from $138,000 in 2008 to $81,000 for the third quarter ended September 30, 2009. The decrease was due to less work on the development of the Alias prototype vehicle

Press releases on the Alias, which looks remarkably similar to the Arcimoto Pulse have been conspicuously absent of late. But the Zap printing presses in their now-empty warehouse keeps spinning off new stock certificates at a heady clip, despite the fact that the stock ( ZAAP.OB) is currently trading around nineteen cents. Quite the comedown since its crowning stock-spiking announcement of 2004 of Zap-electrified Smart cars sent the price to over $4.00. But executives need to be paid! Just spin the presses faster. Despite losses in the quarter ending September 30, 2009 of $2.8 million (on sales of $1.2 million), and a worsening trend line, Zap fesses up:

Under the provisions of SFAS 123R, we recorded $ 963,000 of stock compensation, net of estimated forfeitures, in general and administrative expenses

Of course, the 10-Q offers up some required disclaimers;

We incurred net losses of $7.5 million, $9.8 million, $28 million, for the nine months ended September 30, 2009 and the years ended December 31, 2008, 2007 respectively. We can give no assurance that we will be able to operate profitably in the future. And this:

Our current products are designed for use with, and are dependent upon, existing electric vehicle technology. As technologies change, we plan to upgrade or adapt our products in order to continue to provide products with the latest technology. However, our products may become obsolete or our research and development efforts may not be sufficient to adapt to changes in or create necessary technology. As a result, our potential inability to adapt and develop the necessary technology may harm our competitive position. We may be unable to keep up with changes in electric vehicle technology and, as a result, may suffer a decline in our competitive position. How true and delicately understated. For all the gory details, see Zap’s latest 10-Q filing, including the lawsuit between Zap’s recent investor, who is the Chairman, and the company, over unpaid debts he made to Zap. Messy stuff.
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  • Porschespeed Porschespeed on Nov 30, 2009

    Sounds a lot like GM, and there's still people trading that stock. Regardless of the 10-Qs, how does anybody look at a Zebra and say to themselves "they'll sell millions, I'd best get a piece of the action..."? How?

  • Ingvar Ingvar on Nov 30, 2009

    Is Zap really a going concern? I mean, how many units do they have to sell to cover up a LOSS of 132 million dollars? That's a lot of revenue needed...

  • ToolGuy Here is an interesting graphic, if you're into that sort of thing.
  • ToolGuy Nice website you got there (even the glitches have glitches)
  • Namesakeone Actually, per the IIHS ratings, "Acceptable" is second best, not second worst. The ratings are "Good," "Acceptable," "Marginal" and "Poor."
  • Inside Looking Out "And safety was enhanced generally via new reversing lamps and turn signals fitted as standard equipment."Did not get it, turn signals were optional in 1954?
  • Lorenzo As long as Grenadier is just a name, and it doesn't actually grenade like Chrysler UltraDrive transmissions. Still, how big is the market for grossly overpriced vehicles? A name like INEOS doesn't have the snobbobile cachet yet. The bulk of the auto market is people who need a reliable, economical car to get to work, and they're not going to pay these prices.