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ZAP Deal Going Splat

UPDATED: Another project from electric car developer ZAP (s ZAAP) looks like it’s hit the rails (hat tip AutoblogGreen). The penny stock company is more than a few pennies short on a deal to build a manufacturing plant in Kentucky, according to the Lexington Herald-Leader. Integrity Manufacturing, ZAP’s partner on the planned facility, told the paper that a key investor has pulled out of the project, and that they now need some $150 million-$200 million in federal assistance to get it off the ground.

“We are excited about the opportunity, but Integrity controls the destiny of this project,” ZAP spokesman Alex Campbell told us via email. “There are many ideas we are talking with them about and we would be very happy to build vehicles in the U.S. just like we used to.” ZAP’s low-speed vehicles are currently built in China.

Kentucky Gov. Steve Beshear announced the manufacturing project in August, saying it would bring 4,000 new jobs to the region.

ZAP’s joint venture with Detroit Electric fell apart in September, with ZAP CEO Steve Schneider saying at the time that the company and partner Youngman Automotive Group couldn’t agree on which vehicle to build first. Youngman, a bus maker, wanted to do buses, according to Schneider, while ZAP was keen on cars.

And a scathing feature in Wired Magazine earlier this year went through a laundry list of supposed failed promises and alleged corporate misdeeds at ZAP, pointing out that the company has reported an annual profit only once, and, at the time, had more than one pending SEC investigation against it.

On this latest project in Kentucky, Integrity Manufacturing said that GE Capital had committed to buying $125 million in bonds for the new plant, but has pulled out of the deal. A spokesman for GE Capital has not yet responded to an emailed question regarding the financing company’s involvement in the project. Update: GE Capital got back to us, saying it did not make a commitment to buying bonds for the project and has no involvement in it.

Although a groundbreaking ceremony was held in August, the Herald-Leader said that Integrity CEO Randall Waldman acknowledged this week that little had been done at the site. Kentucky has put up a tax incentive package worth $48 million for the factory, which ZAP said is expected to start producing electric vehicles by next September.

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