Why Vectrix is teetering on bankruptcy, pt. I

Nowadays we have many calling for green vehicles, practically begging for electric vehicles to be available. Vectrix made a very good electric scooter capable of satisfying the transportation needs of many, one with very green zero emissions. Many are scratching their heads and wondering why Vectrix is failing at this time when there’s prominent push for green technology and specifically green transportation. Shouldn’t Vectrix be benefiting from the push for green transportation? Why instead is the company failing?

Like always there are lots of reasons for this, and this and several following articles will be looking into some reasons. Let’s start with some of the simpler reasons ..

Obviously the overall economic conditions are not terribly good. There are plenty of companies having problems, plenty of people have cut back spending. Of course. That’s such an easy to see problem that Vectrix themselves pointed to it in their press release. There’s more to it than this. For example while there are plenty of companies having problems others are doing well. Tesla for example is also selling an high priced electric vehicle and seems to be doing well with it.

Many say the Vectrix is overpriced. To be fair that’s justifiable due to the Vectrix list price being much higher than the price for an equivalent gas motorcycle and list price is near the cost of an inexpensive car.  The desire to spend extra to be green only takes one so far, right? Unfortunately as a startup manufacturer they do not have the economy of scale that incumbent mass manufacturers have. Additionally list price doesn’t take into some other factors such as parking being cheaper (or free), that it’s easier to maneuver through cities, and the price isn’t much different from it’s closest competitor (the Suzuki Burgman 400).

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The “fuel” cost difference leads into the next problem. In 2008 gasoline prices were high and this year they are not so high, approximately $1.50 per gallon less than last year.   In 2008 lots of people were suffering from the short term thinking which led them to buy an SUV that became a problem when fuel prices skyrocketed. It was very popular to complain about high SUV fuel costs, costs that were eating a hole in household budgets around the world.   Many realized that scooters have high fuel economy and make a great fun to ride SUV alternative which can pay for itself through fuel cost savings.  The Vectrix, being electric, has even higher fuel cost savings.   That was last year, this year the fuel cost advantage is not so good right now.

It’s clear that many vehicle purchases are driven by short term thinking (what’s the price of gasoline today).  Longer term issues like the future price of gasoline or the cost of environmental damage and climate change often are forgotten when you’re in the show room looking at prices.

There is even more to this story, see Why Vectrix is teetering on bankruptcy, pt. II and Why Vectrix is teetering on bankruptcy, pt. III.

 

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

2 Comments

  1. Pingback: Why Vectrix is teetering on bankruptcy, pt. II | The Long Tail Pipe

  2. Pingback: Why Vectrix is teetering on bankruptcy, pt. III | The Long Tail Pipe

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