I'm starting a new article to be put on examiner.com and the question is: Why did Vectrix fail? I'm seeing this question a lot on Twitter as well as here and in some of the other articles out there. A bit of shock over this.
I have the following factors as possible causes. I'm interested what y'all think about these. If some of these look familiar I was summarizing the other thread.
- Polish factory expensive? Would it have been better to go to China for rolling chasis as do so many others?
- Hi gasoline prices last year had many looking for an alternative, ditching SUV's for lighter cars and scooters. This year the gasoline prices aren't so high, and the focus is (ahem) a little different than looking for gasoline alternatives to save money.
- Built an international production, distribution, sales and service organization can only have been expensive.
- High price relative to comparable gas scooters.
- legal actions against distributors struggling to fund overwhelming service problems and product manufacturing defects
- Dealerships in the far north where riding season is short, versus concentrating on the south with the long riding season.
- R&D expenses on far out designs (fuel cell bike, superbike) rather than spending that money on real product development.
Also if there are links to legal filings and cases I'd like to look through them. I spent 1+ hours this morning looking for the case in Australia. I did find a couple notes in the "Supreme Court List" in the Victoria (AU) Supreme Court saying only "10371/08 Vectrix Australia Pty Ltd v. Vectrix Corporation". The most recent of those was on June 30, 2009. An off the top of my head guess is there's a possibility the Australia case turned bad for Vectrix, leaving Vectrix owing a bunch of money which they don't have leaving them no choice but bankruptcy. In any case I couldn't find documents showing what's going on.
I got a note from someone that the superbike was little more than a concept model mockup and any serious money that was spent was done by the design company rather than by Vectrix...?
Dear Reikiman
in the list of the reasons you posted id' like to add the following.
Some one have squandered, stolen, and wants allow some competitors to take over the company for little money !!! no more reasons!!!
7 sisters ???
I would add other causes:
- Bad Marketing. The marketing initiatives were too weak;
- Bad strategy. For me the Vectrix Corp. didn’t focused on a main objective. Many were the projects failed that possibly represented many millions out of the window. Projects like, Superbike, 3 wheels Vectrix, Hybrid Vectrix, Vectrix with Li-ion, Vectrix with acid, etc. Everybody knows that a winner must focus on the objective. Vectrix Corp, couldn’t more dispersed;
- Too much investigation. Millions were spent on investigation for other solutions for sure, instead on focusing on getting a better VX1;
- They wanted to grew too fast. For an unknown brand, it was a deadly risk to expand fast to the entire world. That was an error. New technology is the future but people are slow to absorb it. Mainly when is provided by a new company that do not have proofs given.
And many others... All contributed to a rapid disaster. The guys on command didn’t know the meaning of "solid growing".
I think trhe answer may be different all together. Is it possible that there really is not much of a market for this kind of vehicle other than the few hundered of us who post on this website? Lets be honest.
1. The Vectrix does not replace a motorcycle and has little if any appeal to a person who likes to ride a motorcycle. Too little range. Can't do a fun weekend ride. Small wheels and underpowred.
2. The Vectrix does not replace a car even for commuters like me. You still need a car in addition which makes this your 2nd or third vehicle.
3. It is a luxury item with green appeal and somewhat nerdy. Most buyers are probably in their 40s or 50s.
4. It is expensive. If you like to ride a motorcycle you have lots of options at $12k
5. If there is no market in Europe, and apparently it did not sell well there, there sure as hell s not one in the US.
Many of these issues could have been identified with some market research which Vectrix may have failed to do. My prediction is that Brammo won't fare any better and the Tesla sports car will not have a better future either. You have to produce a vehicle that ultimately speaks to the masses to make it profitable. If its a scooter it has to be a Vespa and most Vespa riders have no other vehicle in addition.
I agree with almost all the points made - Vectrix tried to grow too fast with a product that had an untested market. Europe is the only market where there has been a decent penetration of maxi scooters and even then it's a small percentage of motorbike sales.
I agree with the comments about Brammo although it looks more like a conventional motorbike rather than a scooter and its lighter weight might make it suitable for a wider audience. I disagree with the assertion about Tesla though. I don't see any similarities between Tesla and Vectrix. Tesla have a vehicle with similar or better performance (acceleration) than comparable $100,000 sport cars. The market for sports cars in the USA and globally is way larger than for maxi scooters and their business model is not built on having to achieve massive sales volumes and instant worldwide distribution just to stay afloat. The grow slow approach of Tesla and Zero Motorcycles are likely to be far more successful than the shoot for the stars with a hundred rockets approach taken by Vectrix management.
Most of the observations posted here are probably very accurate. The Litigation indulged in by Vectrix Corp came at a fairly late stage and was a symptom of failed management and quality control, rather than the cause. The litigation only served to highlight the weaknesses within the corporate command structure, but the problems were inherent from the beginning. Basically, Vectrix was a great idea, very worthy, sort of like an elephant, but not enough people wanted to own one.
Could Vectrix be revived? Probably not, certainly not as an independent. There is a market for such a Vectrix type product, but only with niche marketing and better quality control and a realistic service plan. The remaining Vectrix will probably be sold for resort hire rental. (a market not pursued by Vectrix )
marcopolo
Your opinion has some good points but it is in general too pessimistic. Tesla is on the right way and it seems that will win because they have a good product and are focused. Their option passes through a solid grow, like Vectrix should have been. There is a market for EVs definitely... I agree that is right now small but will slowly grow and control the market in a few decades from now with the public confidence spreading and better battery technology.
Dear harrys,
I don't agree with you point of view:
1-Vectrix is not a leisure toy, it's an urban comunting vehicle. The open road it's not its main purpouse. In Europe, where cities are very compact (short distances) maxiscooters are the fastest mean of transport. fast to ride, free to park, enought range, enought power to ride at 50 km/h and beat all 125-250cc 4stroke maxiscooter engines. It does replace almost any maxiscooter in the market. Yo can have a look at my european city:
http://maps.google.es/?ie=UTF8&ll=41.386267,2.170669&spn=0,359.990441&z=17&layer=c&cbll=41.387139,2.171594&panoid=qutjooXH-eSzp_...
you'll find scooters everywhere.
2- Vectrix also does replace a car: the great majority of trips one person goes alone inside the car. Vectrix has a good carring capacity, as I managed to transport ikea furniture in it and all sort of things! I hardly ever use the car beacuse it is absolutely impractical in Barcelona (arrive late everywhere, have to pay 5 dollars/hour for parking it in the city center...)
3- It is not a luxury item. As it is my primary comutting vehicle, I need it badly. Without a vehicle like this, my time dies in traffic jams or slow public transport. I'm 28 and it was hard for me buying this bike, but I'm recovering the money invested every day I use it.
4- It is not expensive. Suzuki burman 400 costs 7000 euros + maintenance. Vectrix costs 8900 euros, with (theorically) many less maintenance. After 4 years of maintenance, they cost almost the same.
5- There's huge potential market in europe, the problem is that people does not know this electric option exists. Without knowing this product, you cannot buy it.
The main problem of vectrix has been focusing in countries where this product cannot be understood, like the USA.
I agree with many of the points mentioned and would like to add a few
1. Vectrix should have concentrated on 1 product, making it better , correcting its problems and improving it continuosly. They should have really concentrated in making a very high quality product, this in itself in the long run would have have made them an name for quality apart from the tag of Pioneers that they already had.
Quality is the answer for a new product that people are scared about its reliability.
Pioneering has a nice Aura of new and special Technology which many people will want to pay for. The name shouldnt be lost.
2. Acceleration, top speed and range are simply the limit of the Battery not the Scooter or Motor, so they should have given the possibility of upgrading or downgrading, to a lithium battery, a lead acid (for those who want it as a toy or not spend too much money), and a fuel cell(gasoline). Those should have been there since the begining and then off course promise continuos advances in this product so that owners could dream with 300km range batteries.
Making the owner swap Batteries every now and then (By promising better acceleration or better top speed or better range or all three) would have been a good buissness for them.
3. Keep the brand and the aura of special, out of reach from other brands. Like Harley Davidson, although it doesnt have a better product(in some aspects) than other manufacturers, it does have a brand and special aura that keeps many people spending much more for it. And coincidently it is very customibizable.The owners keep on spending money in it. When you have a small number of clients, but special ones who love thier bike, this is a very important point.
4. Whilst concentrating in the VX-1, they should have taken out a very very large catalog of accesories, becuase for the moment those few but happy clients would have gone on spending more and more on the Maxiscooter. Also another possibility which cannot be exploited by ICE scooters is Customizing electrical and software features they should have tried to look into that type of buissness,selling special electrical features, spacial upgrades, software or even finalised themes, sell you a usb-can cable and a pc software where you can modify many aspects of the scooter, acceleration reaction ,Temperature info, colours , bars, horn noises, timings for recharge, battery saving or performance settings, etc... Off course for all this the centre clock of the vectrix should have been a rectangular, bigger, TomTom navigator like,Colour touchscreen. This aspect would have given a totally new experience with the scooter and i dont think would be too costly apart from the centre screen.Well, i dont think they failed because of this one, i think it would have made the Vectrix more special and make it a total new experience.Different from what we have tried till now.
Raj
Raj, the main problem is that the bike was designed around 1998-2003, and the builders didn't realise how fast technology was advancing, and they failed to incorporate lithium bat, gps touchscreeen, gearless engine and so on...
Hi Raj. I agree with you in almost everything but the rectangular display. I love the display design. It should contemplated a GPS? Yes, but nicely integrated, not by destroying the beauty of it. I know a guy who adapted a phone with GPS and camera in a most interesting way. See it running at Vimeo:
1 - Support for Phone;
2 - Ball for support;
3 - Fix arm;
4 - Oil deposit fixer.
I agree 100% with points 1 thru 5 and with the ultimate fate of Brammo. Probably Tesla too.
So, HarryS, if one can halve the cost then can it become less of a luxury item and a reasonable choice as a second commuter vehicle for more people?
If one can keep overhead down one doesn't need to sell masses to make it profitable. Instead one can wait for the next gas price spike and be positioned ready to take the game to the next level. Plan for a marathon not a sprint.
Not sure I agree at all with your closing Vespa assertion.
John H. Founder of Current Motor Company - opinions on this site belong to me; not to my employer
Remember: " 'lectric for local. diesel for distance" - JTH, Amp Bros || "No Gas.
First article is out:-
http://www.examiner.com/x-14333-Green-Transportation-Examiner~y2009m7d17-Why-Vectrix-is-teetering-on-bankruptcy-pt-I
Thank you all for some of the data.. I hadn't known the Burgman was so close in price.
I've been pouring through their financial statements and some things stand out. According to Vectrix's financial filings, their Cost of Goods Sold was about 20x their income. They were losing a huge bundle of money on every bike sold. Plus they had outrageous administrative and marketing costs. I think John is very right on that they were swinging for the fences, because I think the only way to pay for the high costs is with a big overall income which would have meant achieving mass sales very rapidly.
- David Herron, The Long Tail Pipe, davidherron.com, 7gen.com, What is Reiki
I think you are all wrong and do not have a clue as to what will happen over the next couple of weeks. Never count anyone out. I think big things are in store and everyone should sit back and watch what happens.
LOL. Welcome to our forum Mr. Mike Boyle!
We all hope Vectrix had a future, but according to Investors of Vectrix Corp. their money has been flushed down the toilet and they dont seem to have much hope, i would be inclined to think they way they do. Its their money so it makes it more realistic.We who own Bikes will simply drive them till they stop and then probably pack them away in a corner of our garage untill we get time and will to fix them. Of course unless Mik finds a solution and helps us out :) But it might be that even he gets tired some day because he doesnt seem to get too much support. I personally cant help in programming and untill now wanted to preserve my Warranty. But when i finally know where my warranty stands then i might get more involved in opening up my Vectrix.
Raj
Its really easy to come to the assumption that I am Mike but I am not and would tell you if I were. I just know things that you do not and am really hoping those whom truly like the idea of Vectrix do not give up on them so easily. I am betting on the under dog here. If I am not mistaking that company will be more sound than any other company in the green market if I am right. Like I say time will iron out the wrinkles and we will see who might be correct anyone like to wager?
Yes I agree... Also, Mik has asked for help in programming but I think that anyone appeared. I know a guy that is a specialist in Microchip technology (used in Vectrix). He says that will help to program it if the software and firmware becomes available. Also he may be interested in developing a solution for replacing Vectrix batteries with those from A123 Systems.
Might the rather serious design flaws and reliability problems, which were related to it's gratuitously complex design, have something to do with it? One of the great advantages of an EV is it's simplicity. No EV should have anything software-dependent on it.
I am seeing an explosion of popularity of standard-size 50-150cc motor scooters with not a much more performance than my modded e-max, but they are all Vespas or Hondas. Most buyers don't know that electric alternatives exist, or more likely, that are reluctant to spend their money on one buy one unless it has some brand-recognition. I suspect that an electric scooter with a Vespa nameplate on it would have a much larger following. [edit: I notices Hary S made the same comment]
As far as range or performance inadequacy, maybe I live in an unusual place (Pittsburgh was rated the #1 most livable US city in an Economist (UK) mag. survey) but a 50 mile range per charge is enough to get anywhere and back from anywhere I need to go withing my metropolitan area, excluding the far-out areas. and we aren't considering opportunity charging yet. So, I have trouble believing so many find the range to be inadequate. Of course the Vectrix would be of little use for someone living out in the exurban belt, but surely there is a still a big market in more urban areas, even US urban areas.
Also, instead of A123, Thundersky should be looked at as another replacement possibility, I know that many as wary of their Chinese origin, but my experience with them so far has been excellent.
Greetings all, I am new to this and bought my Vectrix just a few weeks ago. I had never heard of an electric scooter until I asked the salesman what that bike was. He introduced me to Vectrix and it was love at first sight. All my friends are as amazed as I am.
I have no idea what caused Vectrix to hit such hard times. It could be marketing (I had never heard of them before) or poor management or simply supply and demand - or a combination of everything. Personally I think Vectrix is just a bit ahead of it's time. The folks I know are just not into the "green" electric thing as much as we are lead to think. It sounds good but it is so new that people don't trust it yet.
My personal concern is the warranty, will it be honored? At this time, maybe by the dealer. Yesterday I had it's first service at 500 miles or so. They hook up a computer and dump data to a Vectrix service site. The site is still up and running and accepted the upload. The thing is that I have less that 1k, what will happen in a year or two when a problem occurs. With all the electronics and circuit boards - who would repair if Vectrix is gone?
I have read a lot of posts here and am so very impressed with the knowledge of some of the bloggers. I am nowhere even close to that capable so please forgive my lack of depth in my post.
I would be surprised if most Vectrix owners are able to get 50 miles out of a charge. Mine has delivered 30 miles per charge for a year now, which does not seem too unusual. (Suburban riding, 35-50 mph, occasional lights) Thirty miles is barely adequate for my commuting needs.
Agreed that the design appears to be gratuitously complex, but... I still love my V!
Maybe you do know something and have reason to be positive.
I've been reading their financial filings and so far as I can tell have read all of them. Starting with the January preliminary filing Vectrix mgmt began warning that they needed to restructure and/or get more financing or by March-June they'd be toast. Sure enough in March they hadn't arranged financing. Also in January they reported having $3mil in nonrestricted cash and a very bad burn rate. This looks like a bad situation but of course if they can arrange some financing it can help them survive the immediate cash problem.
The bigger problem is the very high cost of goods sold indicating they're losing a ton of money on each bike sold. It also seems they have an oversupply problem (too many bikes on hand). So even if they got financing right now there would be some deeper problems (that I believe mgmt knows about) to fix.
Yes? No? Maybe?
- David Herron, The Long Tail Pipe, davidherron.com, 7gen.com, What is Reiki
Every new company for the most part can expect to lose money and lots of it. If an individual was to come in and look at a purchase for instance of the company they could easily see what is wrong what is right and how much to correct the issues before them. This company still is plenty viable for merger or purchase. The question is can people quit putting a fork in them until it is dead. Either way I say some big news will come shortly and this will go down as nothing more than pre ejaculation of disecting things that are not dead. With that being said in chapter 11 that would not kill it off either. That is a reorganization of business which would give them time to restructure. There are a million companies world wide that have done this just like GM and Chrysler it could be a 363 sale for that matter they are the big thing now. All I am saying is wait and see what happens I have seen this scenerio several times before and the folks were wrong I am still ready to put up my wager if I have any takers.
I'm really glad that so many Vectrix owners love their bikes. So do I. Anyone who has actually read my posts over the last few months will understand my support for all genuine EV makers.
BUT.... there comes a time you just have to be realistic!! Vectrix has squandered $400 million dollars of investors(public money). Vectrix is defunct, the bikes cost 20 times more to produce than they can be sold for! I don't think you really understand the conditions of Chapter 11, and why Vectrix can never qualify. Vectrix has neither the time nor the capacity to 'restructure'!
Wishing something ain't so, is not the same as solving a problem. Vectrix is dead, we are not 'sticking a fork in', we are just the messengers who can reorganise the truth. We are not "killing Vectrix" It has died SOLELY due to the fault of those who were in charge of Vectrix destiny.
It is always sad to witness the passion for a particular brand or product that becomes defunct, by fan's who can't grasp the fact that these companies are first and foremost businesses, and are designed to return profits. They are not charities,religious organisations, or sporting teams. Passionate belief, hope, faith, or even patriotism are misplaced. The sad fact is that no matter how worthy if a product can't find enough market support it must fail. I am always surprised at the level of hopeful support for the very people who caused the death of the product (THE GUY"S IN CHARGE). I was a supporter of Vectrix, not only as a customer, but as an investor. As a shareholder, I have every right to analyse the demise of MY company. I also have a right to demand an explanation from those who may or may not be responsible. Only the very naive or persons with no business knowledge or experience, would think differently. Still, I should not be surprised to discover this mentality among UK contributors. These would be the same, shop-Steward, socialists that created British Leyland and killed the entire UK motor industry. (along with billions and billions of dollars of tax payers money lost).
The future of EV's will not be helped by a passionately defencing the incompetent Directors of Vectrix, but support for those more humble EV makers, who manufacture in less glamorous but more realistic markets. Manufacturers whose products are seldom recognised, but are quietly proving the superiority of EV's.
Oh, and thank God for guys like Mik, JDh etc.. and all the contributors to this forum, (and the forum itself) who are working on a collaborative support effort to keep your vectrix running long after the company its self has ceased to exist.
marcopolo
I deeply hope that you are right.
@ onlytime
Many of us (mik, AndY1, me ...) had and have BIG problems with the service and/or batteries. Vectrix was not able to deliver
hi-end service for a hi-end Product with a hi-end price. I purchased the scooter for daily comute to work as i did with my
1100 Virago before. Many may think i don´t like the Vectrix itself, but i enjoy the smooth silent riding to work and back.
For longer trips i still use the Virago. For shorter trips I prefer the Vectrix because even with the rather low gasoline
price it´s much cheaper than the heavy bike. But to use it daily I need a working battery...
Greetings Mike
I love my Vectrix. I wish I had it home and in working order.
As it is now, it's standing in a garage 400km away, my tires are probably getting egg shaped(flat?) due to not being driven, I don't know in what condition I'll get it back. It was like new, never driven in rain, never water washed, only Motul wash&wax washed. All my motorcycles were like new, when I sold them. My 2003 Yamaha R6 was sold for 90% of it's original price when I sold it a year after purchase. I had to sell her because I was buying an apartment.
If Vectrix pulls out, even as a trademark and we all get our warranties honored, I will keep recommending the bike to folks all around. After all, I'm a member of Electric Vehicles Society of Slovenia and I promoted my Vectrix at news events at every possibility:
http://www.finance.si/galerije/1113/12/
http://24ur.com/novice/slovenija/posta-slovenije-za-zmanjsanje-kolicine-izpustov.html
http://solarmobility.futuretech.si/Logarska09GAL_SLO.htm
People were asking me where and how to get one. It's been 2 months since the end of my 'evangelism' because of death of my V. Even a director of a known motorcycle import company in Slovenia contacted me, because he was considering the import to Slovenia. He was hesitant, because he already knew about the bad financial situation. At that time, my Vectrix failed and I couldn't even give him a demonstration.
Vectrix has to survive. If we loose this ray of light, then we're really only left to the big companies to lead our EV fture, who may abandon EV in a blink of an eye. Look at Daimler, what they did. They purchased 9% of Tesla motors and two months later they sold part if this share to an arab company.
Edit: At least, Mitsubishi seems determined enough to push iMyEV to market. It should cost 25.000 EUR in Europe. There's an interview at Slovenian website of finance.si with CEO of Mitsubishi in Europe. There were also 2 questions about electric vehicles:
In short:
Their vision of EVs in long term and they are the first on the market to offer a series production of electric vehicles. Japan - this year, EU - beginning of 2011. Range = 140km - city driving. Before 2011 they will offer iMIEV to governments and companies with intent of lobying. Price with tax = 25.000 EUR.
I promise that I am right it is not dead it will take alot of work but it will be saved.
I understand your frustration but dont think for a minute that is is just going to blow away because it is not. There are things in the background that will come to light soon and probably shock the heck out of you. Yes people lost money so have I and that I will never see again, but the overall looks to be an asset sale to keep it alive.
I do not think "Vectrix" really failed. But I do not believe the company is salvageable.
Those people who dreamed up and invented, designed and built these amazing machines have actually managed to put several thousand of them (almost) all over the planet. No-one else got that far yet; that's success in my books!
They used "public money" to achieve this, it was practically redistributed from shareholders to the now-owners of the VX-1 scooters.
Many shareholders will of course not see it that way, and some of them will have hardship as a result, but honestly, that is the risk with high risk investments. Sooner or later there will be a company that strikes it very rich with EV production, but many might fail beforehand. Do not invest your rent and food money in these companies; it's basic financial literacy.
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I hope the majority of the burnt investors are able to afford the loss and see it for what it is: An important investment into the future of humanity and the biosphere! Well done and thank you!
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If Vectrix remains a success or not is now up to the owners of the scooters!
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If the VX-1s continue to perform in public view, then they will continue to spark a lot of interest. The next time a beautiful, relatively affordable EV hits the showrooms there might be a whole lot of people who know that they missed out when this fantastic deal was on ($100,000.- scooters being sold for about 10,000.-)! They might just decide to buy instead of loosing out again.
If I had the money I'd buy another one now, they are so dirt cheap.
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Now that all the electrical engineer who are owners can have a look "under the hood" without loss of warranty, we will hopefully take a great leap in knowledge about the way to fix them.
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I hope many talented people will be willing to share: No-one could have built these machines by themselves, and no-one will be able to maintain them by themselves, either.
This information may be used entirely at your own risk.
There is always a way if there is no other way!
Actually, there are a much larger number of electric scooters on the streets in China. They don't have the level of performance of the Vectrix, but that more reflects their intended urban usage and requirement that their cost be low, than the inability to make something like the Vectrix. You shouldn't downplay the number of other electric scooter models available (in Europe and the US anyway) - most of which are much more user-serviceable and user modifiable than the Vectrix.
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