Apparently there's some controversy surrounding the ZAP company. Specifically the issue deals with the hype versus delivery. While the company does produce and sell electric vehicles, it only has two lines. Many of the products they announce never materialize, although the company's board is quick to issue press releases and then capitalize on the stock gains. Their consultants then ask for the press to tread lightly on the company since they operate in the "green sector".
It sounds like this company is nothing more than a sophisticated swindler, producing a couple of products and then hyping up relationships and products that don't or won't exist and cashing in on investors' money.
The ZAP Alias is the newest vehicle that they're hyping. You can place a $99.00 deposit now for the $35,000 vehicle. If you look at the brochure, though, it doesn't have any interior shots or design specs. How can this be when the vehicle is due for delivery at the end of 2009? Probably more hype.
The Alias, ZAP says, will be built and marketed by the venture jointly run by ZAP and Youngman Automotive Group. The name of this partnership is Detroit Electric, a brand originally created by the Anderson Electric Car company, which existed between 1907 and 1939. Detroit Electric (now located in California and run by Lam) says it will be bringing a whole range of electric vehicles to market in the next 14 months. "Our plan is to launch with a 12-meter pure electric transit bus, the ZAP Alias, and two family sedans as early as the summer of 2009," Lam said in a press release. Analysts familiar with the Alias say delivering even that car on this timeline is unlikely, given that ZAP is reportedly still looking for suppliers to design components to make the car feasible.
Wired Report: Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars
Even dealers were swindled. Here's one story:
Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars
John Martin, a schoolteacher from Austin, Texas.
Martin says he met Schneider once, in spring 2006, when "I flew to California to sign the papers and write a check." He says he made it clear that he had limited funds — less than $160,000 from savings and a small inheritance. Company officials assured Martin that this would be enough to get "up and running."
After quitting his job, Martin leased a prime Austin location and spent much of his remaining cash remodeling and rewiring the building for his new dealership. He was thrilled by the publicity his October 2006 grand opening generated among the local media. Attracted by stories in the newspaper and on TV, dozens of potential customers showed up at the dealership that first week, though Martin could offer them little more than a ride in the Xebra sedan he had purchased as his personal car — ZAP had failed to deliver any vehicles for him to sell.
In December 2006, Martin laid off his staff and became a one-man operation. He received his first shipment of Xebras shortly before Christmas. But by then, Martin explains, he had realized how quickly the Xebras ran out of charge. "When I had to tell people about the range, I could see it in their eyes," Martin recalls. "This was the deal killer."
Martin sold one Xebra in January 2007, two in February, and three in March. "Then business just dried up completely," he says. Martin's first customer, an attorney, had to have his car hauled back to the dealership for warranty repairs four times in the first month. Martin managed to remain optimistic, he says, because he knew that the new Obvio model was supposed to begin arriving from ZAP sometime in the spring. "But of course the Obvio never came," Martin says, and he was forced to close the doors of his new business at the beginning of August. By then, his $160,000 was gone. The lawyer who bought that first Xebra from Martin sent a threatening letter to ZAP on Martin's behalf, and ZAP replied by promising to repay at least some of the money he had lost. Then Martin heard nothing for five months — ZAP didn't return his calls. Finally, in January, as Wired prepared this story for print, ZAP settled with Martin, giving him 50,000 shares of ZAP stock in exchange for his agreement not to sue and not to talk to the media.
Martin was able to get his teaching job back, but the school soon had to lay him off. Strapped for cash, he had to pull two of his three young daughters from the private school where they had been enrolled since kindergarten. (Parents, teachers, and friends took up a collection to pay the tuition of his oldest daughter.) As of January, Martin was supporting his family by working construction during the day and delivering pizzas in the evening.
"I wanted so much to believe," he says.
A Forbes article from the summer of 2007 lets ZAP have it because of the hype and failure to deliver:
Forbes: Shock Jocks
A small electric vehicle company stays alive by promising wonderful things--just around the corner.
The Zap-X is a marvel. It solves every problem that has foiled attempts to build electric vehicles. It can recharge in ten minutes and can travel 350 miles on that charge. This rocket produces 644hp and goes from zero to 60mph in 4.8 seconds, with a top speed of 155mph. It carries seven passengers. Oh, and the windows are made out of photovoltaic glass that turns sunlight into horsepower.
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Labels: Business, Interesting
