By on November 30, 2009

unplugged for good

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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8 Comments on “Zap Pulls The Plug On Xebra EV, But Not On Stock Shenanigans...”

  • avatar

    Another startup whose investors had more money than smarts.  Please close it down by December 31, and let everyone get on with their lives in 2010.
    Besides, 3-wheeled vehicles are DOA in the US.

  • avatar
    John Horner

    Where are Batman and Robin when you need them? ZAP, POW, BOOM … tie ’em up and take ’em to jail.

  • avatar

    Why are we chasing the electric car dream without taking an intermediate step? Hybrids seem like the perfect way to test battery technology without the teething pains. Nobody wants an unreliable whip, and with some EVs relying on unproven or unknown battery tech, it creates potential for poor reliability while the battery manufacturers feel out new ways to formulate their batteries to create longer ranges, better cold weather operation, longer life spans, etc. Test new battery tech out in hybrids that can use an ICE to get home when the batteries go kaput, it just seems like the most logical means to me.

  • avatar

    I’m all for EVs, but Zap must die.  My department bought one of their pick ups to haul gear around campus, the thing is just bad by any measure: build quality, power, comfort, all sub-par.  You can get a Nissan Versa for less and it’s ten times more car, no one is going to buy these things.

  • avatar

    How about a Curbside Classic on the old, seventies Sebring-Vanguard CitiCar/Commuta-Car? Apparently, they currently hold the record as the largest producer of purely electric vehicles at 4,300 so a few of them are still around (I’ve seen one parked in a small, nearby town). And this is in the midwest so surely there are some on the street in Oregon. Did the Xebra even come close to that number?

    I thought Zap might have done better if they’d have just resurrected the CitiCar. The technology was essentially the same (flimsy, plastic body on an electric golf-cart chassis) but the CitiCar at least looked more like a regular car with four wheels and two headlights.

    • 0 avatar
      Paul Niedermeyer

      There was a guy down the street who for years had three dead EVs in his driveway: a CitiCar, a converted Renault R-10, and a converted late seventies Cadillac (!); the Caddy even had a special trunk lid that was taller than usual to give some storage area above the batteries. Awesome! But the all disappeared one day, before I started CC. Too bad.

  • avatar

    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?

  • avatar

    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…

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