Thursday, September 24, 2009

EEStor Partner Zenn Motor Company Announces CityThen

That was Zenn and this is now:

"The previously announced cityZENN highway capable electric vehicle will not be developed into a standalone commercially available offering. Management believes that this refinement to the Company's business strategy and focus provides for the most efficient allocation of Company resources to maximize future profit potential."

With that, Zenn Motor Company announced via press release today that they have officially abandoned the production of their own branded, CityZenn, electric vehicle. The news comes as little surprise to all but a few who have not followed the Zenn Motor Company story closely. Hinted at previously at the annual shareholder meeting was the fact that CityZenn, in it's best case would be only an example platform, it is not surprising that they have officially called it quits.

I spoke to Marc Korchin, a Zenn Motor Company retailer in Berkeley, CA. He was not disappointed in the lost opportunity sell a CityZenn because his current business is focused on conversions and the sale of the Wheego. Essentially, as Korchin tells it he had not invested too much time hoping for the CityZenn due to trying to keep his business going now.

On the other hand, another dealer who asked that he not be identified in this article said he is "profoundly disappointed" by the loss of not just the CityZenn but the loss of the LSV oddly enough, which will also be discontinued after the 2010 model year (according to the dealer). Started more as a mission to help combat global warming rather than a enormously successful business, this anonymous dealer shared with me that he had invested a significant sum launching his Zenn retail dealership and wonders how easily he will be able to sell his remaining vehicles. He learned of the halt to the CityZenn plans via the Reuters article that broke the story. Although he went to great lengths to say he found the persons that he dealt with at Zenn to be very friendly and helpful, he was disappointed to learn about the plans via the news.

When he first read of Ian Clifford's initial statement about not wanting to be a vehicle manufacturer a few months ago, he emailed Zenn officials wondering how he could sell cars when the President of the company was saying essentially there was no future in building EEStor powered vehicles. At the time, he was assured the statement was taken out of context and that there would be a future. Later, when he heard a rumor that the LSV would also hit the chopping block, he inquired again and was told the same thing that this was only rumor.

I asked Zenn about these issues today and Catherine Scrimgeour provided the following information:

ZMC is in the Low Speed Vehicle business and is carrying forward the current ZENN as a 2010 model that will be introduced in mid-October and we will continue to provide service and parts support for all our customers.

Congratulations A123 Systems

You dodged a bullet and got your IPO in the bag. Whoever is responsible for orchestrating this progress deserves a pat on the back. Don't get too comfortable though.