EV upstart Aptera closes after failing to raise funds

Fledgling electrical vehicle-maker Aptera Motors has closed and will liquidate, CEO Paul Wilbur said Friday.

Wilbur, a former Chrysler brand manager and CEO of niche design house ASC Inc., said the company had gained conditional approval for a $150 million loan from the U.S. Department of Energy's advanced vehicle fund. But Aptera was unable to raise additional capital required to start production of its first product, a mid-sized sedan.

Aptera's inability to raise money signals a cooling of investor attitudes toward EV startups, Wilbur said. Venture capital firms earlier indicated a willingness to invest if Aptera received the federal advanced vehicle technology loan. But in the interim, the difficulties of launching EVs became apparent, he said.

"A couple years ago, there were a lot of people who thought the automotive industry is easy," Wilbur said. "It isn't."

Wilbur said Aptera, of Carlsbad, Calif., was negotiating to use a former General Motors plant in Moraine, Ohio, to produce the sedan.

The company had talked with the labor union that operated the plant to discuss hiring 1,400 workers who had lost their jobs, Wilbur said. GM produced Chevrolet, GMC and Saab sport- utility vehicles at the Moraine plant until closing it in 2008.

He described the car as having an all-composite body and getting fuel economy equivalent to 190 mpg, with a 130-mile range.

Aptera's work force of about 30 employees was let go, he said.

Aptera had obtained support from Rep. Darrell Issa, R-Calif., for the U.S. loan.

Issa is among Republicans who have criticized the Obama administration for issuing a $535 million loan guarantee to Solyndra LLC, a solar-panel maker that filed for bankruptcy protection in September.

“With officials playing the role of venture capitalist and picking favorites like Solyndra, success for companies like Aptera that have to compete against others with government sponsorship can be especially difficult,” Issa said in a statement. “Aptera never received the taxpayer backing they sought, and perhaps the only good news” is that it failed “before federal funds were put at risk.”

Damien LaVera, an Energy Department spokesman, said that “Aptera did not receive a conditional commitment for a loan from the department.”

He declined to comment further on Aptera’s loan application.

The advanced-vehicle fund, one of three such programs the Energy Department administered for alternative-energy projects, has $4 billion remaining after giving loan guarantees to companies including Ford Motor Co., Nissan Motor Co. and Tesla Motors Inc.

Chrysler Group LLC has asked for $3.5 billion.

Aptera, which never produced a car, had planned to make a five-passenger sedan priced at less than $30,000 that would run on electric power. Electric cars made by General Motors Co. and Nissan sell for about $41,000 and $33,000 before a $7,500 U.S. tax credit.

Wilbur worked in product planning at Chrysler Corp. and managed the Jeep and Dodge car brands. He led Saleen Performance Vehicles. He also tried unsuccessfully to make ASC, of suburban Detroit, a builder of specialty vehicles.

Dec. 2, 2011

After years of focused effort to bring our products to the market, Aptera Motors is closing its doors, effective today. This is a difficult time for everyone connected with our company because we have never been closer to realizing our vision. Unfortunately, though, we are out of resources.

It is especially disappointing since we were so close…

Aptera executives had been engaged in exhaustive due diligence with the Department of Energy (DOE) pertaining to an ATVM (Advance Technology Vehicle Manufacturing) loan. Our business plan was examined from top to bottom by internal agency representatives, independent consultants and experts in academia. They did an amazing job of vetting us and they tested every possible weakness in our plan. And after nearly two years of discussions, we had recently received a Conditional Commitment Letter for a $150 million loan.

The ATVM loan would have provided funding for the development and commercialization of a five-passenger, midsized sedan (similar to a Toyota Camry) that would be base priced at less than $30,000 and deliver more than a 190 mile per gallon equivalent. The concept of this vehicle had been in place since the very beginning of Aptera, and we had been wholly focused on its development for the last year. The last remaining hurdle was finding new funds to match the DOE loan.

We were so optimistic that the company would move forward that we were in discussions to reactivate a mothballed automotive plant in Moraine, Ohio. In the past months we had engaged with the labor union that operated that facility to discuss the hiring of 1,400 new job opportunities. These jobs would have reactivated talented workers who had been dismissed when the facility was closed.

During the same time, we continued development of our patent-pending composite manufacturing system that enables energy efficient vehicle production by drastically reducing vehicle weight (by as much as 30%) while tripling its strength. This same patent pending system allowed us to finish the surface of our composites without manual finishing and without the high capital cost of a typical automotive paint shop. In all, the process would save nearly $750-million versus a typical volume auto assembly plant start-up.

We were well on the way to satisfying the vision of efficiency on which the company was founded and we are confident that with time and capital we could still achieve our goal. The Aptera formula: aerodynamics plus light weight design (through composites) delivered efficiency of 206 EPA miles per gallon in tests at Argonne National Labs. That wasn't a simulation; it was real measured performance. Despite that promise of efficiency, this challenged market – specifically large private investors – did not have an appetite to lead an investment for the perceived low volume return of our three-wheeled vehicle. So we reprioritized our product plan to four-door sedans, which also cost us time.

We remain confident, even as this chapter closes, that Aptera has contributed tech new technologies to build a future for more efficient driving. Through the dedicated staff at Aptera, our board and suppliers we have touched this future. All that remains is for someone to grab it. We still believe it will happen.

Paul Wilbur

President and CEO

Aptera Motors