The news last week about a management shakeup at Aptera was troubling indeed. When founders are ousted from the company they started it’s usually a signal of troubles irregardless of soothing press releases from the company in question. Aptera’s soothing press release claims that founders Steve Fambro and Chris Anthony were not ousted, but instead that Fambro is taking a much-needed vacation and that Anthony’s other startup companies were heating up requiring more of his attention. However other reports citing unnamed internal sources portraying a different very grim scenario.
Aptera’s press release of Nov 17 strongly implies financial difficulties with phrases like “Aptera management is being a prudent steward of all resources to ensure future viability” and “strategy to streamline our spending”. The questions we are left with is just how deep were the workforce cuts and just how dire is the situation at Aptera. Aptera’s press release claims they will begin production when they receive another round of funding or when they secure financing through the DoE Advanced Technology Vehicle loan program. Aptera’s history with that loan program is interesting. At first it was denied access to the program. Later an Act of Congress opened the door for Aptera and other makers of two- and three- wheel electric vehicles to take part (see Aptera’s cool looking non-car and the DOE loan program loans). As noted in earlier reporting the DoE program does not provide loan money right away, but instead requires that the recipient achieve various milestones and one would imagine a required milestone for Aptera to begin production. (see Fisker, the vast rightwing conspiracy, and the $528 Mil DOE loan)
The Gas 2.0 report on Nov 20 says that Aptera’s financial problems, mismanagement, vehicle revisions, and employee unrest could truly unravel the entire company. According to the report, echoing Daryl Siry’s earlier report (see Apparent management shakeup at Aptera, founders reportedly ousted), Aptera’s problems stem from the September 2008 hiring of Paul Wilbur as CEO. Wilbur brought in a management team to “stack” the executive team with “his” people, he instituted a series of changes to redesign the 2e, and he has been a failure at raising capital.
The most troubling of those people is Laura Marion, the CFO. In prior employment, while working for Delphi Automotive, she planned “one of the largest accounting frauds in US history”. In that scheme she “edited, reviewed, and drafted documents to present inventory exchanges as sales,” to grossly overstate company revenues. With that kind of background it’s questionable why she would have a C-level job at any company. It’s claimed that at Aptera she, on at least one occasion, did not respond in a timely manner to a Venture Capitalist desiring to fund Aptera resulting in a funding failure.
Most important is the failure to raise capital. Startup companies like Aptera require funding until they make enough sales to be self funding. By delaying production for a year with a large number of design changes, Paul Wilbur put the company on a path of requiring more funding than their original business plan. While the company raised over $30 million prior to Wilbur’s hiring, there was no capital raised afterward. While economic conditions have been, uh, tough since September 2008 that didn’t stop companies like ZAP, Tesla, Think, Fisker Automotive and Coda Automotive from raising capital. Indeed one attribute of the current economic climate is interest for and support of green technology companies.
Aptera was once a promising company with a daring vehicle design and a bright future. The company is named after a wingless bird that cannot fly, which the company claims to mean “wingless flight”. Maybe it will turn into an unfortunate choice of corporate symbolism if the company itself never takes off. Of course the history of entrepreneurialism is rich with companies that go from boom to bust and back to boom again. An example named above, Think, a Norwegian electric car manufacturer, has gone bankrupt at least twice only to be rescued by capital infusions each time. Aptera’s story is not finished, yet, no matter how dire it looks today.
NEW FEDERAL LEGISLATION MAKES APTERA ELIGIBLE FOR MILLIONS FROM DOE LOAN PROGRAM Dept. of Energy’s fuel efficiency loan program expands to make companies like Aptera – with its ultra-high mileage, three-wheel electric vehicle – eligible for funds
In the Matter of LAURA MARION, Respondent. ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934
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