Ecotality Announces Bankruptcy, Gets $1.2M in Help from Nissan

By · September 17, 2013

Blink network

After months of speculation, electric vehicle charging firm Ecotality froze trading of its stock ahead of an official bankruptcy announcement today. The filing took place yesterday and warns of the likelihood that “common stock will have very little or no value given the amount of the company’s liabilities compared to its assets.”

Ecotality has reportedly laid off the majority of its workforce as it struggles to meet its daily operational commitments. For at least the past several weeks, the company has been forced to cut back or suspend the servicing of its more than 13,000 home and public charging stations on the Blink Network. Customers have been told that there is currently no timetable for re-establishing maintenance of the network.

Ecotality built its network largely with the support of stimulus funds from the Department of Energy, a factor that could make it a lightning rod for criticism from detractors of the 2009 stimulus plan. Currently, the company faces a number of investigations ranging from insider trading allegations to a class action lawsuit alleging that it withheld vital information from investors.

What’s clear is that despite receiving more than $100 million in stimulus money from the federal government, Ecotality has failed to generate enough revenue to sustain operations. The company’s revenue model was oriented primarily toward selling EV charging stations to individuals and public infrastructure providers—with the idea to eventually reap long-term rewards in the form of fees from its public charge network. But public charging is still in its nascent stages, and it appears that Ecotality—like several of its smaller competitors—ran out of cash before it could build a sufficient revenue stream.

The major question for EV owners and advocates is what will happen to the vital (though currently unprofitable) Blink Network, and weather what remains of Ecotality will be able to complete the collection of data on charging habits that it agreed to provide for the DOE's EV Project as a condition of the federal loan.

For the time being, Nissan has offered to provide temporary relief in the form of a $1.25 million loan that it hopes will tide the company over until its assets can be liquidated. As a result of this temporary mini-bailout, speculation has arisen that Nissan may eventually take on a larger role in the restructuring of the company. Nissan certainly has an interest in keeping drivers of its LEAF electric car fully supported by charging infrastructure, but there is little evidence so far to suggest that any car company will step in to rescue the Blink Network.

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