Seven months ago the CEO of plug-in car maker Zenn Motors, Ian Clifford, said that the underlying factor of its exclusive deal for small- and midsized cars with high-profile energy storage startup EEStor was the fact that the bigger automakers didn’t want to take a risky bet on early-stage technology that didn’t have a lot of testing behind it. Fast-forward to today and EEStor has completed substantially more testing — enough to trigger a new investment from Zenn that brings the automaker’s stake in EEStor to around 10.7 percent.
But EEStor, which says it will deliver a production prototype to Zenn by the end of this year, still represents a risky bet. This week, GM-Volt has an interview with Clifford, in which he tries to make the case that EEStor is a smart play. The big question is what has really changed with EEStor, which has announced (and slipped behind on) production timelines before? Pretty much nothing. Clifford answers the questions by saying, essentially, trust me:
“[T]he unique thing than [sic, that] Zenn other than Lockheed Martin has is access to the facility and very demonstrative indication of their progress. And we see very clearly where they are at and how they’re progressing….Often people are saying there is no facility or assembly line, etc this is simply not the case.
Where will Zenn get the resources for its final payment to EEStor if the startup delivers on its prototype promise? Zenn has sold 2.65 million common shares, raising gross proceeds of C$9.28 million ($8.4 million), according to Green Car Congress, and this financing is expected to help fund the final milestone payment to EEStor. For now, Zenn and its shareholders are still stuck playing wait-and-see. As Clifford tells GM-Volt, “Right now, we like everyone else are waiting for at voltage components off their production line. And that’s as specific as I will get.”