ECOtality Heading For Bankruptcy As DoE Shuts Off The Tap

4 years ago by Jay Cole 24

Power Looks To Be Going Off At ECOtality And Maybe Their Blink Netwrok Of Charging Stations

Power Looks To Be Going Off At ECOtality And Maybe Their Blink Network Of Charging Stations

ECOtality, best known for its Blink network of commercial charging stations, as well as residential chargers, today filed a 8-K with the SEC that basically says ongoing operations are all over and they will look to sell the company or just go bankrupt.

“…the Company has experienced certain material adverse developments that in the aggregate significantly impact its ability to meet its ongoing obligations and to fund anticipated operating losses.”

Needless to say, shareholders were none too happy.   The stock, which closed Friday at $1.46, was suspended today, then fell 80% to close at 30 cents.  (Real-time quote can be found here)

Blink DC Quick Charger

Blink DC Quick Charger

What are those adverse developments ECOtality mentioned that threatened the company?  According to the filing:

  1. They aren’t selling enough EVSEs (Electric Vehicle Service Equipment), at least not enough to “support the Company’s operations in the second half of 2013”
  2. ECOtality’s Minit Charger industrial line, which was scheduled to launch later this year, failed so miserably in testing that the company said it will now “not be introduced in 2013”
  3. No one will lend them anymore money“…the Company learned on August 8, 2013 that financing that was being pursued from an existing investor would not be forthcoming. The Company continues its efforts to obtain additional capital but there can be no assurances that such financing will occur on reasonable terms, or at all…”

But the real reason the company has seen its last days are contained the final reason stated.  The government is out.

“The Company has been notified by the U.S. Department of Energy (“DOE”) that the DOE is suspending payments to the Company in connection with the EV Project…the DOE sent a letter to the Company stating that it is suspending all payments under the EV Project while it investigates the situation and determines whether the award should continue. This suspension has had a significant impact on receivables that were anticipated to be collected from the DOE, in addition to remaining amounts anticipated to be invoiced and collected under the EV Project.”

...Or Not

…Or Not

Also, sometime late Thursday, August 8th , a letter from the DoE also notified ECOtality that:

“… (ECOtality) is not authorized to incur any new cost or obligation under the award and that the DOE would not reimburse the Company for such costs during the suspension. Further, the DOE instructed the Company to provide notices to its vendors and subcontractors of the suspension.

Since going public in 2005 the company has never recorded a profit.  As of their most recently filing on March 31, ECOtality had capital obligations of $71,000 and long-term debt of $188,000 as of March 31.  During the first quarter of 2013, the company reported a loss of $588,000 on revenue $15.9 million worth of revenue.

Nutshell:

The DoE cut ECOtality off on Friday, and the company effectively went bankrupt on Monday.

 

Tags: , , , , , , ,

24 responses to "ECOtality Heading For Bankruptcy As DoE Shuts Off The Tap"

  1. Spec says:

    Well I can’t say that I am surprised. There has pretty much never been a viable business model for public charging. It has been a loss-leader business.

    1. Assaf says:

      Yup. Anyone wanting to provide by-the-hour charging as a business needs to be far more careful and savvy, and work hand-in-hand with EV driver associations to figure out the needs. And these seem to be:

      1. Workplaces
      2. Shopping centers, department stores, supermarkets, libraries and other places combining high visit traffic and long park times.

      1. Assaf says:

        places with “long park times” – includes parks of course 🙂

  2. Dan Frederiksen says:

    Actually a better profit margin that Tesla Motors 🙂
    what? too soon? : )

    1. Aaron says:

      [citation needed]

      1. Assaf says:

        Don’t
        Feed
        Da
        Trollz
        😉

  3. evnow says:

    Read family with no experience in EV business – nor a workable strategy – but political connections has ruined the company. Or so I read.

  4. scottf200 says:

    A little disturbing as my Blink charger is currently broke and my service call was just delayed because “they need to update software on their end”.

  5. Aaron says:

    Their predatory sales techniques didn’t help either, I imagine. A day after getting my i-MiEV, I had people from their company hounding me via phone, cell phone, and email to buy their chargers. I got fed up with it and said f— your company, delete my “free month of charging” account and die in a fire. Looks like they did.

  6. Bloggin says:

    The smart money is in connecting workplaces where employees get free charging, apartment/condo buildings and residential homes with charging stations. Planting charging stations up and down the roadway, that charge twice what consumers pay at home for electricity, will continue to be a loosing proposition.

    News Flash! The ‘gas station’ is now in the consumers own garage.

    This reminds me of the backwards marketing behind Starbucks booming business, but then deciding to sell pounds of their coffee in Walmart/retail stores. So consumers figured out that they no longer had to pay $5 for a cup of coffee when they could make it at home. But Starbucks was still surprised when many of their stores lost business and had to close.

    It’s cheaper and more convenient to charge the EV at home, or at the office. But charging station marketing is still surprised that no one is willing to go through the hassle of searching for a charging station, waiting hours for a charge, and then paying double for the same electricity they can get at home.

    1. evnow says:

      Really, consumers figured out how to make espresso using their drip machines ?

      I guess, consumers figured out how bad and burnt *$ coffee actually tasted 😉

      1. Assaf says:

        *$ – thanks for the symbol! Will use!

    2. David Murray says:

      I can make a sandwich at home pretty cheap. But sometimes when I’m out and around the town it is more convenient to get a sandwich at Subway. Do you expect Subway to charge the same amount as I would pay for my own sandwich at home? What about the soda that I buy in bulk at the grocery store. Do you expect the corner convenience store to charge the same amount?

      The price of the charge isn’t the problem. The problem is that the chargers aren’t located in places that would be convenient to use them. Who wants to sit at a Walgreens for several hours while your car charges?

      1. Glenn Marcucio says:

        I’ll pay for a charge in public but not a penny more than I would pay for a charge at home. With that said, I think the price for a charge could be a problem. I totally agree that chargers aren’t located in places that would be convenient. Another huge problem is people without EV’s or Plug In EV’s parking in EV charging station spots.

        1. Dave R says:

          And you sir, are the reason why public charging struggles.

          If public charging enables me to drive my EV instead of a gas-burning vehicle, I will happily pay double the cost of charging at home if not more. What are you going to do without any public charging infrastructure? Stay within 30 miles of home?

          If you average the cost of public charging with your home charging, the effect on your average cost / mile is minimal since the vast majority of charging happens at home.

          1. io says:

            Agreed 100%. If charging (and especially quick-charging) away from home saves me from the hassle and expense of switching from my EV to an ICE, or maybe even makes it possible to consider an EV in the first place, I’m ready to pay much MUCH more than what I’d pay at home.

            Say I’m doing 100~120 miles. Average ICE: 4 gallons or about 15$.
            EV: one quick-charge needed, 15~20 kW*h — even 1$/kW*h is competitive.

            Now say I’m only doing this longer trip once a week, the other days I’m driving 50 miles.
            ICE: 15 gallons total, over $55 per week.
            EV: ~100kW*h from home + one session at a public charger. Even it that one was $40 or over $2/kW*h, it’d still be a great deal.

  7. scott moore says:

    Anyone know what this means for the DC fast chargers blink had? Those are the only
    ones available here… 🙁

  8. evnow says:

    Jay,

    A bit more background. Looks like $95M (or most of the money) has been invoiced/paid. To continue operations Ecotality needs commercial EVSE sales revenue. But who would actually pay money for their products ? And thus the bankruptcy.

  9. Foo says:

    How is ChargePoint doing? Will they be in the same boat as ECOtality? And what does this mean for collaboratev (the joint venture of the two companies)? Does this also means that all Blink charging stations are going to go dark? Or, perhaps will they be taken over? As these are the obvious next questions, would have been nice to see these thoughts at least mentioned in the article.

    Also, a better headline would have been, “ECOtality Heading For Bankruptcy As DoE Pulls The Plug”. 🙂

    1. Jay Cole says:

      …seemed too easy, (=

      1. io says:

        Disagreed, a better headline would mention that ECOtality has warned of financial issues, NOT suggest that it’s going bankrupt.

        That is just dishonest attention-grabbing, just as claiming that someone asking their bank to discuss alternate mortgage payment arrangement is becoming homeless.

        Re Blink’s network, no change for now, although they do ask their users to support them.

        From http://www.ecotality.com/an-important-message-aug-12/ :

        August 12, 2013: We wanted you to know that the needs of our drivers are paramount to us and despite the challenges we currently face, we will continue to operate the Blink Network and maintain our Blink chargers until further notice.
        We urge you to visit a Blink charger today and show that you support the growth of a public charging infrastructure.

        1. Jay Cole says:

          Update: September 17th, 2013

          Ecotality has filed for bankruptcy
          http://insideevs.com/with-government-money-spent-ecotality-files-for-bankruptcy/

  10. Ed Cheung says:

    Company ahead of its time. Commercially viable electric charging will not be feasible until there is critical mass and enough EV cars on the road. Will probably sporadically pop up by private parties or by Large corp at very strategic locations like hotels, mall/movie theaters. But not until 2017 to 2018. I do not pay to charge my smart phone and do not normally charge my phone outside of home except on vacation or when away at the end of very long day. Same will go for 95% of all EVs.

  11. Ed Cheung says:

    Company is DEAD which is even worse than Bankrupt because at least in bankruptcy the vultures can swoop in and pick apart the dead carcass. Thes picked apartarts can then atleast be redistributed to more viable locations and be maintained. For now the company is just in limbo and the charging stations are essentially going to rot. The DoE will be smart next time ant let the free market fix itself and have the charging stations placed by true demand. If the DoE wanted to distribute the funds correctly, they should have only incentivized with tax credits for profits from the charging stations. Of course that would mean working with the US treasury – never will happen. What a waste of money. Just like Solar loans. Billions gone with little to show for it.