As we noted earlier this week, electric vehicle charger company Ecotality, Inc., may be joining a club – companies serving the EV business filing for bankruptcy or considering doing so.
To repeat, the US Department of Energy has put Ecotality's request for more stimulus payments on hold after the charger company admitted that it's having trouble getting financing and may have to declare bankruptcy. Ecotality fessed up to its problems in its latest Securities and Exchange Commission 8-K filing. Ecotality is exploring options including restructuring or sale, but may be forced to file for bankruptcy, the company said in its SEC filing.
Ecotality has counted on DOE funds for its growth. The company has received more than $100 million in federal funds, $99.8 million of which has gone into the construction of EV charging stations primarily through the DOE-sponsored EV Project. 12,000 of the company's chargers may need to be recalled, too.
The federal funds were squeezed in 2011 when the Securities and Exchange Commission investigated Ecotality for insider trading. Ecotality had also been under investigation by the US Department of Labor for possible violations of the Fair Labor Standards Act and the Davis-Bacon Act. However, the charging company continued receiving federal funds until recently.
Last week, the DOE announced it was suspending EV Project payments while it investigates the situation and that it comes from Ecotality's inability to secure financing. Ecotality said that it hired restructuring firm FTI Consulting to help find financiers. Ecotality joins the ranks of other companies like Fisker Automotive and formerly-named A123 Systems in surviving the challenges of DOE-backed companies breaking in to the alternative energy marketplace.
As some readers noted, there is a meme growing that all electric vehicle companies fail, especially those that get government money. Granted, there are many troubled plug-in-vehicle-related companies, but some are successful. And if it's just failure we're interested in, then there are plenty of gasoline and automotive companies that are no longer in business, even when they got government subsidies. That's not really news, but it's worth repeating.