“Aptera’s production and delivery will be tied directly to funding,” said Aptera Motors CEO Paul Wilbur in a release from the ultra high-efficiency vehicle startup late yesterday. That very mild assessment belies the reality that Aptera is peering across the Valley of Death, where many ventures die for lack of funding at the critical commercial development phase. According to the release, dwindling cash reserves are forcing the company to delay production of its inaugural vehicle, the three-wheeled electric 2e, until 2010 rather than the end of this year as previously announced.
Hitting the new 2010 target (or any future production goal for that matter), will require Aptera to bring in fresh capital, and it’s banking on either a federal loan or private investment to come through. At this point, the company is shifting its focus away from development, which “has been outpacing the rate of fundraising.” The company has laid off an undisclosed number of employees, co-founder Steve Fambro is taking an extended vacation (he’ll return in the new year), and Chris Anthony, the other co-founder, is “stepping aside from day-to-day activities” — all in an effort, Aptera says, to slow the burn rate and free up resources for top priorities: raising cash and starting volume production of the 2e.
After all, nearly 4,000 customers are waiting. That’s how many deposits (fully refundable) Aptera says it has received for the 2e. And then there are the heavyweight investors — including Google.org, Idealab, The Beall Family Trust and others — who Aptera says it hopes to provide with “strong returns.”
This week’s sober announcement from Aptera is in some ways reminiscent of the straits startup Tesla Motors found itself in late last year, when plans to set up manufacturing for the delayed Model S sedan were put on hold pending approval of a loan guarantee or low-interest loans from the Department of Energy. Tesla CEO Elon Musk described the loan guarantee back then as a “when, not an if,” adding, “We’ll do what we need to get approval.”
Tesla ended up winning $465 million in DOE loans this summer (though according to a report this week from former Tesla marketing chief Darryl Siry, the company hasn’t “seen a dime” of the award yet). If private investors fail to come through for Aptera this time — it has already raised more than $24 million — the company hopes to secure a loan under the same program that has approved loans for not only Tesla, but also another startup, Fisker Automotive.
Aptera’s odds in the program are better now than ever before, given that federal rules were recently revised (after a significant lobbying effort by Aptera’s backers) to allow high-efficiency, three-wheeled vehicles like the 2e to at least qualify for funds. But Aptera is smart to rein in spending, because having an open door at the DOE and a team of deep pocketed investors in your corner won’t necessarily deliver you across the Valley of Death.