When Darryl Siry, former Chief Marketing Officer for electric car maker Tesla, calculated the “implied value” for secretive ultracapacitor maker EEStor at over $1.5 billion, based on the entirety of Zenn Motor’s market cap, he was being somewhat cheeky. But the reasoning behind the calculation is the reality: The Canadian electric vehicle maker has given up on its previous car business and placed its entire fortunes on the promises of EEStor.
Last month Zenn CEO Ian Clifford told reporters of his change in strategy, and that Zenn would no longer plan to sell its own higher-speed electric vehicle (the cityZENN car), and would also “shift focus away” from the low-speed electric it currently sells. While Clifford has had this vision of an “Intel Inside model” with EEStor for awhile (selling the ultracaps for other companies’ cars the way Intel’s chips are used in many companies’ PCs) he had not yet let the world know that he was trimming away any part of the company not based on the EEStor technology.
So, as Siry put it, that announcement was “a moment of clarity for Zenn – recognition that the entire value of the company lies with its speculative bet on EEStor’s game changing technology claims, and not with the expected value of its now abandoned car business.” Hence the equivalent of Zenn’s stock and market cap with EEStor’s hoped for value.
Clifford, readily admits that fact, and tells Toronto Star reporter Tyler Hamilton in an article this week:
The entire aspect of our business model is dependent on EEStor commercializing that technology. . . The transformative moment is with the commercial proof, and then the whole tenor of the discussion changes to the excitement about the reality.
Clifford says he is now in “the same waiting game as everybody else,” and just waiting for the delivery of the first commercial unit from EEStor before the end of the year — so about two and a half months from now.
During a lunch a few months ago Siry and I were chatting about how some of the entrepreneurs and investors he and I have worked and talked with in Silicon Valley have such an unbelievably high tolerance for risk (notably his former boss Elon Musk). I remember both of us grimacing at the thought of being under that kind of pressure of raising and losing millions. Clifford must be feeling that kind of pressure every day at this point — with the added stress that he has absolutely no control over the situation.