Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

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reikiman's picture
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Wired Magazine has an article / expose on ZAP this month. I've been following ZAP for over 10 years and know enough about them that they are best kept at the end of a 10 foot pole. However Gary Starr is clearly, for whatever faults he has, a visionary (of sorts) who knows the dream of EV's and 'Zero Air Pollution' and has been leading EV companies for his whole professional life.

The article appears to be portraying ZAP as a fly-by-night sham. As I said, I tend to distrust them but it's such an interesting company and they have sold a lot of electric vehicles in their history. But they have a long history of big promises that don't get followed through.

The article starts with Ehab Youssef, an intellectual property lawyer in San Jose, California. He bought a dealership in Los Gatos. The article mentions his "first disappointment" over the failure of ZAP to really have SMART cars for sale like they were promising. Um, here the article itself has a truth problem -- by September 2006 Daimler/Chrysler had already announced they themselves would be importing SMART cars and anybody smart enough to be an intellectual property lawyer would have (should have) done due diligence and realized that ZAP would be unable to deliver the SMART car.

In the fall of 2004 ZAP had announced they would begin importing SMART cars themselves. However Daimler/Chrysler was not providing them cars so ZAP had to buy cars, at retail, in Germany, bring them to the U.S., get an American company to do Americanization of the SMART car, take the Americanized car to the DOT for crash testing, etc. They did all this and then had a $25,000 price tag on it. ChasS recently said he is buying a SMART car for $12,000 (???) .. ZAP was at a huge disadvantage because of the long process they were going through to get and import cars. And in June 2006 Daimler Chrysler announced they would directly import SMART cars. I remember the date because it was while I was traveling in Scotland.

The article is long, has quite a lot of details right, but nobody at ZAP participated in the article.

I attended a ZAP shareholders meeting in the fall of 2000. ZAP's share price had risen to over $13 the year before -- they were planning to merge ZAP with GEM. However something happened to scuttle the deal. From the podium Gary Starr told a story (answering a shareholder question) about someone from GEM's board calling him to pitch a deal involving installing gas engines on GEM cars, supposedly they had someone willing to buy lots of those. But Gary made a principled stand saying "ZAP means 'Zero Air Pollution'" and he says that is what scuttled the GEM merger. The ZAP share price fell a lot and there was a lot of concern in the shareholders meeting. ZAP would, in the future, go into Chapter 11 bankruptcy.

In the back of the room was Nancy Cadigan, Jim McGreen's wife. Jim McGreen was the founder of ZAP and both of them had been on ZAP's board and according to the article both had been pushed out shortly before this. Nancy was in the back of the room heckling both Gary Starr and John Dabels and offered to tell all truths during a break. Dabels had the nerve to blame the declining share price on McGreen.. McGreen at the time was selling off his shares at 5,000 shares a week.

So, hey, the ZAP-X and other vehicles they plan to sell look really really really really cool. ZAP's history is more than spotty. But today this guy is working with them who had been a top guy at Lotus but quit that to join with ZAP. And they have this JV arrangement with Youngman, a large vehicle maker in China. Those two bits imply they have some serious business going on today.

With the nature of this article it's surprising they missed a glaring thing. ZAP used to work with Donner Investments in an arrangement that seemed more than shady. Donner was the main analyst company following ZAP and wrote stock analysis papers about it, but they also had a role where if I'm remembering the terms right they were the "market maker" putting them in the role of needing to promote and sell ZAP's stock. This always struck me as being odd -- making it look like Donner was playing both sides of the game with ZAP. Donner was in the role of both selling the stock and writing the analysis papers about the company. Ideally the source of company analysis is from an uninvolved bystander so that the opinions they write in analyzing the company are uninfluenced by financial arrangements with the company. But, if I'm understanding the arrangement right, Donner was in bed with ZAP.

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

Hype Machine: Searching for ZAP's Fleet of No-Show Green Cars

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jdh2550_1's picture
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Re: Hype Machine: Searching for ZAP's Fleet of No-Show Green Car

I certainly have "mixed feelings" about ZAP. On the one hand they seem to be a "jack of all trades and master of none" when it comes to EV's - simply searching around for a product to sell. On the other there's all these possibly positive signs about the ZAP-X.

It's kind of like the EEStor thing. I'm not sure either will ever really pan out like they claim - but boy if they do it will be great!

AFAIK, AltairNano is supplying batteries for the ZAP-X (these are the folks with a 20,000 life cycle battery)

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Re: Hype Machine: Searching for ZAP's Fleet of No-Show Green Car

I like my ZAP Zapino

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andrew's picture
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Re: Hype Machine: Searching for ZAP's Fleet of No-Show Green

Hype is nothing new to the business. "Aim for the stars and you'll get to the moon", or something like that. I'll wait until I see what they deliver before I put much thought into what they claim on their website.

reikiman's picture
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Re: Hype Machine: Searching for ZAP's Fleet of No-Show Green Car

Quote:

I like my ZAP Zapino

I'm glad that ZAP every so often manages to make a good vehicle. I'm glad you're having a good time with your Zapino.

My first ZAP vehicle was a DX bicycle kit.. I owned two of those over time. I also owned a Zappy at one time. Every so often I am interested in buying a Xebra. I think the Obvio would be a blast to own.

Somehow I missed mentioning the Lectra. ZAP bought EMB and brought the Lectra in-house. Over time Lectra production etc ground to a halt. In one of the shareholder meetings I attended they made a splashy announcement of a new version of the Lectra -- the original one was 24 volts, this new one would be 36 volts and have body-work with fancy-schmancy painting by some artiste who paints using electricity. It sounded great but somehow was never sold.

I really like my Lectra ... it rides like a dream and it's a shame that there aren't thousands of them on the road. Instead there's only a hundred which were ever built and some were dismantled to build other vehicles.

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- David Herron, Green Transportation Examiner, Green Transportation Info, The Long Tail Pipe, Torque News, electric race news, davidherron.com, 7gen.com, What is Reiki
- EVT 4000, Charger bike (rebuilt), Vego 600sx (rebuilt), Electrified Electra Townie
- Lectra motorcycle, 1971 Karmann Ghia

reikiman's picture
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Re: Hype Machine: Searching for ZAP's .. No-Show Green Cars

There was a pseudo-rebuttal posted on Xebra_EV just now:-

http://autos.groups.yahoo.com/group/Xebra_EV/message/15089

It's written by a ZAP/Xebra dealer who had a phone meeting with Steve Schneider (ZAP CEO) going over every detail in the article and especially focusing on how one-sided it is.

Oh, I just reread what I wrote and it looks like I only presented one side of my opinions about ZAP. For all their flaws they are one of the longer-lived EV companies and the only non-NEV company to be selling something that looks like a "car". That by itself is a big accomplishment given the status of other EV companies.

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- David Herron, Green Transportation Examiner, Green Transportation Info, The Long Tail Pipe, Torque News, electric race news, davidherron.com, 7gen.com, What is Reiki
- EVT 4000, Charger bike (rebuilt), Vego 600sx (rebuilt), Electrified Electra Townie
- Lectra motorcycle, 1971 Karmann Ghia

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