Why did Vectrix fail?

Mik, a brilliant dissertation!! Although some of it don't understand, and some of your conclusions i don't necessarily agree with, I feel we are all very lucky to be able to access your vast amount of knowledge, both theoretical,and more importantly practical, that so enrich these discussions. It is contributions of guys like you that spread the advance of EV acceptance! With guys like you, Reikiman and ole JDH, who can doubt that we are on the right track?

I have just left a very boring and bigoted, professional dinner where the speakers were dinosaurs as far as EV's were concerned. The demise of Vectrix was, of course gloated, as evidence the the earth is still comfortably flat, mind you the wine was not only expensive, but excellent, and to my delight my taxi was a Prius!

Aldo, I would be very grateful if you would pass along what ever you are smoking!

The reason Vectrix failed is because of upper management. Mike Boyle was arrogant, with no idea as to what he was doing. It was a big power trip for everyone in management once Vecttix went public. The company went down hill from there. The product was brought to market well over a year before it was ready. Battery development/testing was unheard of until after the bike was being sold and problems were discovered in the field............The basis for all electric vehicles is energy storage, and batteries are the most important aspect of the vehicle, but at vectrix it was the LEAST important aspect.

Yep, VARNA96, you will get no argument from me! But to be fair, there were other factors that contributed to the demise. Although, given the tremendous amount of money and loyal,even fanatical fan base, it took a monumental lousy manager to do everything wrong! But then, ole Mike Boyle, he's just such the man to snatch defeat from the jaws of victory!

MARCOPOLo, I won't blame it all on Boyle, cuase he came in when the Titanic was listing. But instead of doing the correct thing and pulling the product to fix the battery problems and properly finish the design along with scaling back production and bringing it back here stateside, he decided to become a sales company............sourcing chinese crap with a Vectrix logo.

Vectrix was a huge success.

Despite the company, Vectrix showed the world that a 2 wheeled EV could be produced that people would buy. And it got people thinking, 'I could do that better' Just look at how many EV cycles there are on the market now compared to a year ago.

We will all benefit from a company brave enough to pave the way. We would have preferred a company that succeeded with its business plan, but sometimes that doesn't happen.

The king is dead, long live the king....

As far as the practical side of it, of course it was not a practical purchase. You can have your high gas mileage scooter, but the fact is you are still burning gas. Those who appreciate the Vectrix and the bikes that follow get alot of pleasure from having a vehicle that does not burn gas or oil. And we are willing to pay a premium for it. It is not a money concern, it is an environmental concern that will continue to grow.

VARNA96, you are partly correct. The titanic had got off course, but M. Boyle was engaged to get the ship back on course. Instead he drove it on to the iceberg! But it wasn't just the the factors you outline alone that was the full extent of his appalling management. The disastrous service policy,arrogant refusal to respond to dealer/distributor/complaints except by bombast and gratuitously offencive derision, along with a long list of ego driven poor decisions, such as ill-advised litigation against those he offended,refusal to accept assistance from major manufacturers, (who could have improved product quality, but lessened his authority.) His personal greed and wastage, the squandering of resources on administrative and legal executives, in preference to engineering and product development. Wasteful and confusing marketing, complex corporate structures to conceal sly and deceitful transactions. The list goes on and on...

The trouble was, Mike Boyle possessed no real commitment to the advancement of the product. He lacked comprehension and respect for the true potential of Vectrix. Sadly, Boyle also lacked the necessary talent, commitment and business ability to understand the complexities of EV marketing and production.

Worse still, he also lacks the essential ingredients required by any CEO to successfully lead a pioneering company. Some of these qualities are charisma, vision, humility,honesty,and a deep personal commitment to understanding the product. In these qualities, Mike Boyle was totally deficient, he was simply the wrong man for the job!

A great example of some of these qualities were displayed by William Clay Ford. When he realised that he was a CEO of limited ability, and Ford needed greater ability than he possessed, he searched for the very best CEO he could find, appointed him, and devoted his time to making the most of the contribution he could make as Chairman, to the success of Ford.

Knabo, I understand your thinking, and in a way you are right, as an EV Vectrix showed the potential of EV transport. But as a business model, it was a disaster. The thing is,from an outsiders point of view a brave attempt may be quite admirable. However if you were an investor,creditor, supplier or employee, you might think very differently indeed.

I guess it's all in the perspective!

Marcopolo - but let's not forget someone gave Boyle the job and didn't do anything to correct the situation if it became apparent to them it was the wrong decision. So, at least someone gets to share the blame.

BTW - where do you get all your information from?

It failed for the same reasons the EV-1 failed because the Vectrix is adequately powered and potentially maintenance free. If the Vectrix had been perfected it would become the standard for short range 2 wheel transportation, who would want anything else and that's why it wasn't perfected. If it was mass produced using less moving parts and being maintenance free it would cost less to buy and last longer, I guess that's why GM scraped there EV-1.

Hm.. I've said similar things about GM and why the EV-1 failed. However in the case of Vectrix, now that I've read through their financial reports I don't buy this argument being applied to Vectrix. In this case there is a clear monetary problem due to over-reaching in the size of the business, several costly mistakes, and losing gobs of money on each bike sold. At that level there isn't any conspiracy to shut down a potentially maintenance free vehicle. What would be the motivation of Vectrix's management to essentially "take a fall"?

In the case of GM one could argue they're big enough (or used to be) that they could spend $1B developing a throwaway project and squash it when it looks like it might succeed. But Vectrix isn't in GM's shoes, they're a startup and don't have the ability to throw away gobs of money for some higher purpose.

Also ... just how would any vehicle ever be truly maintenance free? Battery packs, tires, brake pads, etc etc etc all wear out over time. Mistakes happen, nothing is ever perfect, etc. The Buddha taught for that matter that nothing is permanent, that everything in the world of forms crumbles to dust over time, and the only permanence is impermanence. In other words the Buddha's teachings predict there can never be a maintenance free vehicle.

On most forums I don't get many replies to my posts and as a consequence I'm not that carful with my words and after thinking over what you said I now think that Vectrix didn't purposely not perfect there scooter but I still think that could be a possibility.

That is one of the best questions so far! Where do you, "Marcopolo", get your Information??
I do not think that we will get an satisfying answer on this subject at all!!!

That is one of the best questions so far! Where do you, "Marcopolo", get your Information??
I do not think that we will get an satisfying answer on this subject at all!!!

Have in consideration that Marcopolo is an owner and a defrauded shareholder. He reads a lot about Vectrix reports and news and I think that he does not have to answer provocative questions.

provocative question? question yes!! provocative not more than "Marcopolo"himself!! Owner...defrauded Shareholder.... I am sure we will find out very soon what he is....

provocative question? question yes!! provocative not more than "Marcopolo"himself!! Owner...defrauded Shareholder.... I am sure we will find out very soon what he is....

... and that is?

Like all well informed people, marcopolo gets the information from many sources.

It's all about the capacity to understand information and the willingness to actively search for it.

I just asked a simple question because I was interested. It wasn't meant to start a debate. marcopolo gets interesting information a lot sooner than most folks and I just wondered where he got the info because it's interesting. I have no hidden agenda. There are no need for answers in proxy of marcopolo - if marcopolo chooses to answer great, if not then no big deal.

If they're public sources of info - great, I'd like to be able to read them first hand. If they're private sources then so be it.

In reply to Jim Knopf's observation,

"provocative question? question yes!! provocative not more than "Marcopolo"himself!! Owner...defrauded Shareholder.... I am sure we will find out very soon what he is...."

I reply: Y'know Jim, when you have nothing useful to say, try not saying anything!

I gain my knowledge, accurately or inaccurately, mostly from the same sources as everybody else. There is nothing very sinister about investigative due diligence. It just takes more hard work and application than inventing idiotic conspiracy theories. (less exciting though). It does help that I have developed useful sources of information regarding corporate activities in certain area's. Also listening carefully to people who may possess information not generally available helps. When I quote such information, I am always very careful to state that such information, may or may not be accurate, as it may simply be a informant biased viewpoint.

I have on various occasions had the dubious privilege of observing Mike Boyle in discourse. From these exchanges, his written remarks, the complaint of many, many others, my own assessment of his personal style, and the results of his actions, I have formed the opinions I expressed. Now these are my opinions, Mr Boyle declined the opportunity to answer his critic's from the witness box, in proceedings he launched!

(by the way you're not related to M.Boyle are you? Maybe his PR consultant? )

I have never said that I am a defrauded shareholder. Your accusation displays your inability to accurately read, and report what others write accurately. Mr Boyle, nor any Vectrix Director, has so far been charged or even accused, of fraud or any other criminal activity. That is a matter for the correct investigative authorities to determine. To my knowledge, it's not an actual crime, to be a lousy CEO.

Jim, I can understand if you love your Vectrix, and hate the fact that the company has failed! Failed for reasons you no doubt find inexplicable. But resenting people who know more than you, is a bit silly. I would not attempt to debate challenge or deride the technical knowledge of Mik, John, David , any of the engineers, because it would quickly become clear that my my silly abuse would be just a sad attempt to cover my total ignorance, and I would make myself look ridiculous!

I hope, I contribute to the EV debate with the knowledge and skills I possess, equally, I really appreciate learning from others whose skills I have not acquired.

Marcopolo, you would be suprised of how many idiotic conspiracy theories have come out to be true and how many are still in that stage. We are not talking about UFO's here we are talking about buissness, and in buissness you will find all type of strategies being applied, like in wars everything is valid unless you loose! (Im not saying i think this way) It just happens.
Your point of view is very respectable but its hardly one angle.
By the way, maybe you are better informed than others but here is a comment of a guy who probably is well informed also and says that " he recently told the Chinese that the future of the electric car rests on their shoulders". Maybe he is just a good buissness man, but he surely understands something that we dont.
And why this guy wont try first his project in the USA(the best car market of the world)? Very Strong opposition from unintrested people?

http://www.autobloggreen.com/2009/07/27/shai-agassi-to-australian-car-industry-become-the-saudi-arabia/

" he recently told the Chinese that the future of the electric car rests on their shoulders".

And did they all listen? HAHAHA!

The problem I find with conspiracy theories, is that they are invariably inventions to avoid facing simple truth. Worse, they deflect from real solutions and create excuses for ignorant and bigoted views, loudly aired by people who are frustrated that at being unable to understand the complexity of issues.

As to the pondering of Shah Aggassi, I have my doubts as to the viability of "Better Place". Like much of the green debate, "better place " utilises a great deal of platitudes and feel good popular propaganda, but it really falls down on logical information that can be forensically examined. Any enquiring sceptic is met with evasion, shouted down by "better place" believers, and accused of being obstructionist.

As to the comments to the Chinese, he may well be correct, but I don't see the industrialists or the leaders of the PRC appreciating being moralised at by a person with such a lack of understanding of the dynamics of the PRC!

I recently had the opportunity to visit Australia and was fortunate enough to ask a Minister of the Australian Government, to verify Shah Aggassi's claim the "he had signed up Australia with official Australia CGovernment commitment" The minister replied, that although the Rudd Government was delighted to welcome any enterprise that would benefit the Australian environment, the Government had no relationship, or endorsement of " Better Place", officially or unofficially!

It is true, that several of the energy corporations, have agreed to examine Better Place proposals, this does not confer endorsement or any form of agreement.

So why all the Hype?

I, like all of us are watching the Chinese EV developments hopefully. But hope is not reality and sadly many commentators over enthuse about the achievements of the PRC, just as some commentators did with the USSR.

My own prediction is that the first viable affordable production EV's, will come from Japan, and Korea, followed by the US with Europe building luxury versions eventually. (but thats just my view).

Please excuse my wandering of the original topic of this thread.

My own prediction is that the first viable affordable production EV's, will come from Japan, and Korea, followed by the US with Europe building luxury versions eventually. (but thats just my view).

I agree but I also add that the "first winner" will be a well known brand in the world automotive business. We are learning that there are very high risks with recent brands support. Consumers will learn in time with their own wrong options... But the show must go on and I deeply encourage new brands to present their "babies", but just don't try to give a bigger step than you can. Internationalization, if possible, can be only archived successfully after the product consolidation.

Again, we see a "bad management"
http://www.autobloggreen.com/2009/07/27/apterans-to-mothership-phone-home/

The "reason" is very clear why Vectrix failed : "Bad Management" and it seems the reason for this other EV company, which also doesnt respond to clients etc etc.. shouldnt the goverment of the USA do something about American EV Companies by helping them with loans and changing the managers?
So all these managers seem to forgetting about their clients when selling their products? Isnt "Clients" one of the most important things in a buissness of this type? Havent all these managers got a degree to know that? Why do they all do the same mistake?
Are there going to be EV clients, if companies who try to make affordable EVs, keep Dissapearing?
Is this article true? Is this the image they want of EV buyers? :
http://www.autobloggreen.com/2009/07/16/msnbc-early-electric-car-adopters-are-the-lunatic-fringe/
Why Goverments dont seem to help? :
http://www.autobloggreen.com/2009/07/20/report-tata-threatening-to-nix-vista-electric-launch-in-uk/
Why Very important Companies dont believe in EVs?
http://www.autobloggreen.com/2009/07/23/new-toyota-na-president-doesnt-see-electric-vehicles-as-mainstr/

Its very sad but there doesnt seem to be much interest in Europe and USA for EVs success.
Actually EVs are a threat to established ICE manufacturers, Oil companies, Goverment´s income taxes and many others, so for an (affordable for the masses)EV company to suceed it needs to be made by a Major manufacturer and its batteries produced by some Major Tech Company or Energy Company.
If you think about it, after what is happening to the EV Companies that are here today, people will be even more convinced that unless its not a Major manufacturer, its not the time to buy. I bet that if the Vectrix VX-1 would have been a product from BMW, Harley Davidson or Honda, it would have sold much much better.

RaDy, I suspect you are quite right that Vectrix VX-1 would have been more accepted and successful had it been manufactured by a Major manufacturer. Bad management is not exclusive to EV manufacture! It is the nature of capitalism for the incompetent, under-resourced, or just plain unlucky to perish. This is not necessarily a bad thing, as it provides rewards for the innovative, efficient, and competent.

I hate to disillusion you, but a college degree doesn't automatically make you good manager, or a good person. In fact, the wealthiest and most successful entrepreneurs, often have little formal education. Capitalism, and free enterprise, may seem very harsh and even unfair, but it really is the best system. Excessive government interference in auto manufacture only produces a vehicle like the Trabant! Affordable yes, but who the hell would want one?

But take comfort from the fact that the rise of the EV is on the march and nothing can hold the development back.

shouldnt the goverment of the USA do something about American EV Companies by helping them with loans and changing the managers?

Egad! I'll take the loan but don't replace me please! I'm a nice guy. Heck I have a degree, I talk to customers, it remains to be seen whether I'm competent in the eyes of the market. I have to pay the mortgage and feed the family as well as risk my life-savings starting a company. Why on earth should Uncle Sam come in and tell me what to do? (Yeah, I know RaDy means well, and likely only means publicly traded companies - but it's still a bad idea).

Although the loan would be nice having large amounts of government cash "up for grabs" is NOT necessarily a good thing. My company has been approached by at least two companies who wished to "partner" with us so that they could bid for government money. In this sense their definition of "partner" means finding someone with at least a little EV credibility so that they can score some free money. Yes, my company would have profited from these ventures - however, we politely declined.

See, I have this naive belief that we should concentrate on producing a product that meets customers' needs. It's quite a quaint notion these days.

Ultimately that's why Vectrix failed. Their management forgot that the way to sell product is to listen to customers (aka the market) and to respond appropriately. The customer really is king.

Hahahaha, you seem a very honest manager JDH, what i was reffering to is not so honest and obviously the ones that are taking the companies to the graveyard. The goverment has helped all types of banks and insurance companies with dishonest managers. Dont they think that being pioneer in EVs is a bright future for the USA?

The face of business in America is changing. John, feel free to stay outside the box and to forge new ground. The companies who put the customer first may not be the ones you hear about so much, but they are the ones that tend to stay around. Public companies are forced to put the investor first and their customers usually pay the price.

Well... where is "onlytime" now? Time has run out? So much of this, so much of that... I guess that "Really Mad Chipmunks" found a bigger mad that "boiled" then away...

I think that it's pretty clear that they messed up on some levels. I am going to hazzard a guess that some of the people that started Vectrix might have come over from JSF project and maybe they didn't know about how to balance a budget that doesn't have crazy government contracts. A lot of the stuff the company did was clearly the "correct" and conservative way to run a business. They purchases some technologies (planetary drive), a luxury most start-ups can't afford. They actually got 2 plants up and running. They actually made an assemble plan on US soil and in New Bedford, MASS of all places. An old industrial city that hasn't seen a new plant since 1950. Very few companies as far as Vectrix got. There are TONS of businesses like "Venture Vehicles" that didn't even get close to production. They barely got there vehicle to prototype. Don't forget, companies like Tesla are just barely staying in business at present. Tesla needs a lot of venture capital still, I don't think that they have made a profit. Plus they are seeking government help as well.

Another thing to consider is that there are 0 EV's from any of the major car manufactures yet. All of the existing designs have been keeping their heads down because the cars are all over $40K and have really poor range. Even Toyota has not announced their next Hybrid, either because it's not ready or because they are not ready to risk their current market share now that they are the king of the mountain. Remember, 6 years ago they said that their entire car line would be Hybrid in 10 years... they have 4 years left. Sadly, the drop in gas prices and the bad economy are amounting to a situation much like that of the 70's where TON's of "green" technology were developed just to be dropped when oil prices dropped and consumer demand dried up. Personally I was expecting $5 and $7 gas at this point, not $2 gas. While I believe in Global Warming I don't believe that most humans react to anything unless its instantly killing them. Something like global warming that takes years to slow down the momentum just doesn't resonate with most people (at least Americans.)

I think at the end of the day they did spend a little too much on R&D on other products as mentioned but the Market really wasn't ready to spend the money on a electric scooter. Vectrix marketing wasn't ever mainstream but I don't think mainstream would ever have caught on. Stupid things like Mini-bikes took off with Zero marketing. Much like Segways, Vectrix's are rich kid toys and both products assumed that they would be HUGE and they sorta have a cult following due the the prohibitive costs. When I was 20 I remember scoffing at the price of a new Honda Scooter at $2400 USD. A Vectrix is a whopping $7K-14K new depending where or when you purchased it (not including the present price.) Sometimes I have to remind myself that my first motorcycle was a Honda CBR in rather good shape and it only cost me 1K in 2000.

I think that we own a piece of history. It's a vehicle that will most likely get far more attention in years to come when people ask, why isn't this company still around their product looks awesome? Hopefully we can keep these remaining bike running or get some aftermarket parts to keep them running as long as possible. Other wise they are just going to have the fate of so many other bike and just be slowly parted out on Ebay and then junked.

Much of what you say is very valid. But it was really a combination of factors which caused Vectrix to fail. I think you have to divide the analysis into two separate assessments, 1) The Product 2) The Corporation.

1)It's true the Product had some defects, but overall was a credible and, if not perfect, high quality EV with real potential if marketed correctly.

2) The Corporation. As I have written elsewhere, in the early days, Vectrix was over optimistic and economically naive. However given time vectrix should have improved and capitalised on the enormous amount of goodwill it enjoyed. Sadly, at this crucial moment in its corporate development, just when the company really needed flexible, shrewd, experienced and disciplined management, it got Mike Boyle. It is easy to blame Boyle for all the ills, (those who supported him long after it was evident that he was steering to disaster must also accept culpability), but it is accurate to say that with a better CEO, Vectrix would have still struggled, but survived. M.Boyle was not only grossly incompetent, but possessed of an arrogant and bullying management style. If any single factor must be singled out as the reason for Corporate failure, it must be the appointment of M Boyle and adherence to his policies, long after it was obvious Vectrix was heading for insolvency.

Infinite - you make some good points. Here's some additional info to consider

Personally I was expecting $5 and $7 gas at this point, not $2 gas. While I believe in Global Warming I don't believe that most humans react to anything unless its instantly killing them. Something like global warming that takes years to slow down the momentum just doesn't resonate with most people (at least Americans.)

Yes, I was expecting $5 gas too. I like to tell folks they can thank me for the price of gas coming down - as we started pouring money into our company gas prices peaked and then fell like a stone. ;-) I agree very much with what you're saying with a couple of caveats: (1) they also react when it's their wallet being killed (2) I think the "green movement" today may prove to be a little more resilient (after all they sold a lot of Hybrids which from a strictly ROI perspective don't make all that much sense). BTW, luckily gas prices aren't the only reason we got into this game - but I still am one of the few people who smile when I see gas prices climbing.

When I was 20 I remember scoffing at the price of a new Honda Scooter at $2400 USD. A Vectrix is a whopping $7K-14K new depending where or when you purchased it (not including the present price.) Sometimes I have to remind myself that my first motorcycle was a Honda CBR in rather good shape and it only cost me 1K in 2000.

Bear in mind that the MSRP on a Vespa GTS 300 is 6199 and a Suzuki Burgman 400 is 6599. So, prices ranging from 5500 to 7500 (the CuMoCo C1 models) don't seem all that much out of step with the gas alternatives. Yes, the gas alternatives go further - but we have other advantages. However, price is really quite close at the $7K end of the range that you mention. Charging over $10K seems to be a tough sell to me (and I expect the Brammo Enertia will suffer a similar fate as the VX unless they are set up to deal with very small volumes).

New companies are always hard to make successful. In my experience Vetrix missed the risk bet and focused on the wrong technical elements. The reason I bought a GPR-S from Electric Motor Sport was because they created a product from proven components. The frame is from an existing motorcycle, the propulsion and electronics are from existing vehicles. The only new item is the LifePo4 batteries (and associated BMS charger)- and that's enough risk for anyone. Their approach minimizes cost and improves reliability. That may be why they did so well at the TTXGP also. So far my AC version is working well. That doesn't mean they are home free but their approach gives them more of a fighting chance. The KISS (Keep It Simple Stupid) approach almost always has the best chance. That goes for both engineering and marketing.

ChuckJ

Much of what you say is very valid. But it was really a combination of factors which caused Vectrix to fail. I think you have to divide the analysis into two separate assessments, 1) The Product 2) The Corporation.

1)It's true the Product had some defects, but overall was a credible and, if not perfect, high quality EV with real potential if marketed correctly.

2) The Corporation. As I have written elsewhere, in the early days, Vectrix was over optimistic and economically naive. However given time vectrix should have improved and capitalised on the enormous amount of goodwill it enjoyed. Sadly, at this crucial moment in its corporate development, just when the company really needed flexible, shrewd, experienced and disciplined management, it got Mike Boyle. It is easy to blame Boyle for all the ills, (those who supported him long after it was evident that he was steering to disaster must also accept culpability), but it is accurate to say that with a better CEO, Vectrix would have still struggled, but survived. M.Boyle was not only grossly incompetent, but possessed of an arrogant and bullying management style. If any single factor must be singled out as the reason for Corporate failure, it must be the appointment of M Boyle and adherence to his policies, long after it was obvious Vectrix was heading for insolvency.

But then there was probably also the impact of the corporation on the product.

The product was most likely made cheaper by telling engineers to cut very important corners, like removing the BMS.
It is also likely that the corporation forced the marketing of the product before it was truly ready.