Ecotality, which manufactures vehicle charging stations, is navigating uncertain waters after it filed for bankruptcy and was hit with class-action lawsuits claiming it mislead investors.
Ecotality, based in San Francisco with offices in Phoenix, declared bankruptcy on Sept. 16 and the business was auctioned on Tuesday. Potential bidders were required to submit their final bids by Oct. 7, according to the bid procedures order.
Ecotality maintains more than 40 charging stations in downtown Phoenix and about 915 throughout the Valley.
“This is a plan to keep the core network running as we are currently doing and to transition it to a new entity that will be able to keep it going and vibrant,” Chief Marketing Officer Joshua Katz said. “Ultimately, the future will be up to who is the long-term owner of the business. I can’t predict what will happen beyond that.”
If Ecotality were to shut down, there would be few charging stations remaining in downtown Phoenix and significantly less throughout the Valley.
Jeremy Legg, city of Phoenix economic development program manager, echoed Katz’s uncertainty about the company’s future. However, he said he wasn’t too worried about the impact the company’s bankruptcy might have on the downtown Phoenix business community in the near future.
“They don’t have a major employment presence here and their infrastructure is not that widespread at this point,” Legg said. “Obviously Phoenix wants all the businesses here, whether they’re headquartered here or not, to be successful.”
Jim Stack, president of Electric Auto Association’s Phoenix chapter, expressed similar sentiments. A potential closure of Ecotality’s Blink Network, the company’s brand of charging stations, wouldn’t have as big an impact as many might think, he said.
“Nope, I don’t think it would make much difference at all,” Stack said. “Very few people I know rely on their charging stations. There are so many more choices around.
“There’s too many other companies that are doing the same type of thing,” Stack added. “I don’t think it would matter too much if one (charging station company) disappeared. The other one will pop right in.”
However, Stack estimated that Blink Network currently constitutes about 95 percent of the charging stations in the Phoenix metropolitan area. It had a head start largely due to the $100 million grant the U.S. Department of Energy gave the company a few years ago, Stack said.
Other companies that Stack said he believes will fill the void if Ecotality’s network were to close included ChargePoint Inc. and Volta Industries, which are developing their Phoenix-area networks, and GoE3, the Scottsdale-based startup that plans to set up charging stations every 50 to 75 miles along U.S. Highway 70, Interstate 40, I-20 and I-10.
After announcing that it might declare bankruptcy in August, Ecotality was faced with class-action lawsuits from its investors, who claimed it had mislead them. Stock prices fell more than 80 percent through the month of August to 27 cents.
“I imagine the class action would have no bearing on the auction,” Katz said. He also noted that the lawsuit was out of the hands of the employees who work for the company and would ultimately be at the court’s discretion.
Information from a form used to notify investors of events that are important both to shareholders and the U.S. Securities and Exchange Commission that was filed by Ecotality on Aug. 8 indicates that the company was experiencing certain developments that had significantly impacted its ability to meet its ongoing obligations and to fund anticipated operating losses.
“While today’s (Sept. 16) bankruptcy filing is regrettable, it is a necessary step to ensure that we can continue to meet the needs of Blink customers and continue to operate the Blink Network which is comprised of over 4,000 commercial charging stations,” Ecotality CEO Ravi Brar said in a press release.
According to another document filed on Sept. 16, Ecotality and Nissan North America Inc. entered into a credit agreement for Nissan to provide up to $1.25 million of financing to keep Ecotality operating during the bankruptcy.
Ecotality, Nissan and Chevrolet developed a partnership in 2010 to head the advancement of zero-emission mobility through development of an electric vehicle charging network, called the EV Project, Ecotality’s website states. The 60-plus partner project covers 21 major cities, including Phoenix and Tucson, and metropolitan areas in nine states and the District of Columbia, the EV Project website states.
Katz couldn’t comment on which companies might be interested in purchasing Ecotality at the auction. Court documents filed on Oct. 5 indicate at least one buyer, Tellus Power Inc., offered a $3 million bid for Ecotality’s ownership.
Tellus is a subsidiary of Tusai Holdings, a company based in Hong Kong, according to Nasdaq.com.
Tellus could not be reached for comment as of Tuesday evening.
Contact the reporter at Hunter.Marrow@asu.edu
