EV Charger-Maker Ecotality Warns of Bankruptcy
- Ecotality has received about $135 million in grants from the federal Department of Energy since 2009.
- The California-based company says production problems and slow sales have dried up revenue.
- If Ecotality files for bankruptcy, the government still gets the benefit of the 12,000 chargers already installed, plus research done on how those chargers are being used.
SAN FRANCISCO — Ecotality Inc., a major player in the public plug-in car charger market, has notified regulators that it is considering bankruptcy or a forced sale "in the very near future" if it cannot reverse its falling fortunes.
The company, one of a number of advanced technology and "new" energy companies supported in part by grants and loans from the Department of Energy, operates the EV Project free charger program underwritten by the DOE.
It has received about $135 million in federal grants since 2009 to install no-cost plug-in car chargers in public and commercial spaces and in private residences. In all it has installed about 12,000 "level 2" or 240-volt chargers and 40 "level 3" fast chargers capable of delivering an 80 percent charge to an electric vehicle's empty battery pack in 30 minutes or less.
The DOE recently stopped making payments to Ecotality after the company informed it that it might not be able to continue meeting its contract obligations in the EV Project program.
Ecotality said in a filing this week with the Securities and Exchange Commission that a new charger it has been developing for the industrial market won't be ready because of "unacceptable performance." Additionally, the company said revenues in the second quarter have dried up because of slow sales of its Blink and Minit-Charger charging stations.
The company also reported that a few of its commercial chargers have malfunctioned, overheated and even melted the charging connector when plugged into a car that was being charged. It said makers of various plug-in vehicles were threatening to tell their customers to avoid Ecotality chargers unless the company replaced the charging connector on all 12,000 chargers it has installed.
Ecotality also was required recently to pay workers and contractors $855,000 to cover back wages and damages in a pay dispute.
The company's woes shouldn't be seen as an indictment of the plug-in vehicle market. Although sales of battery-electric and plug-in hybrid vehicles have been slow, more than 120,000 plug-in cars and trucks are now on the road in the U.S. and some analysts expect 90,000 more to be sold this year alone. Increased volume, while perhaps too late for Ecotality, should boost the demand for home and public charging stations.
Edmunds says: At least the feds got 12,000 chargers installed in this deal. When solar panel maker Solyndra went under, there were almost no physical assets to seize, as most of its federal grant funding was spent on research and development.