Lesson Learned As Salinas Sues Bankrupt Electric Car Maker?Lesson Learned As Salinas Sues Bankrupt Electric Car Maker?

It’s a sad fact of business that many start-up companies fail within the first few years of trading. Electric car fans are quite used to this and even the most promising new companies can struggle.
One such company is Green Vehicles, an electric start-up that folded back in July. Green Vehicles had created a three-wheel electric car known as the Triac 2.0. The ungainly little EV was touted to have a 100-mile range and to go on sale from $25,000 before state and federal tax incentives.
When the company folded it took over $500,000 of investment from the city of Salinas, California, with it. Now, Salinas city attorneys have filed a lawsuit against the company to recover some of the lost investment.
According to the lawsuit, “[Green Vehicles] breached every term of the contracts… defendants knew at the time of entering into the contracts that they did not intend to use the monies as required in the term of the agreements.”
Green Vehicles co-founder and President Mike Ryan hasn’t commented on the lawsuit, but said of the company’s closure “Our dream was to change transportation for ‘regular people’ to something practical, sustainable, affordable and cool… My most sincere apologies for not delivering the conclusion we worked so hard to bring about.”
We can understand the city of Salinas’ frustration at their lost investment, but we can’t see them getting much of it back – and we don’t have much sympathy for them, either.
Start-up companies are always going to be a risky investment. Sometimes that investment pays off, and had that been the case, Green Vehicles was expecting the venture to contribute tax revenue of $700,000 per year, as well as creating 70 jobs. However, even in regular start-ups the chance of survival is low.
Start-up electric car companies are even more of a risk as the market itself is still deciding whether electric cars make sense. We’re losing count of the number of times Swedish EV-maker Think has gone under, and by the standards of unheard-of makers, it’s a fairly big company. Uptake is slow even on the best of electric vehicles, so curious little three-wheelers like the Triac are already on the back foot.
Putting $534,000 into a start-up with an un-proven product, in a tough market still recovering from an economic downturn seems unwise, even considering the benefit of hindsight.
As ever, stories like this are a lesson that you must always invest wisely, particularly if you’re dealing with your city’s budget. The city of Salinas and Green Vehicles are simply two more casualties of a fledgling industry.
[KSBW]
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