Ecotality faces restructuring, possible bankruptcy
Despite raising $8.2 million in mid-June, it appears Ecotality Inc. (Nasdaq: ECTY) is joining a growing club of government-backed alternative energy companies eyeballing bankruptcy.
The San Francisco-based seller of the Blink network of charging stations filed an 8-K report conceding it was struggling to meet cashflow obligations due to inadequate sales volume, which prompted the U.S. Department of Energy to place its stimulus payments on hold. To make matters worse, it's been reported that Ecotality's financial woes are preventing the company from fixing design and manufacturing defects in its charging systems, which could lead to a recall of 12,000 inoperable Blink stations.
Although the struggles of DOE-backed alternative energy companies (Fisker Automotive, A123 Systems, Solyndra) are chronicled by conservative media as famous blunders that should discredit pursuit of a clean energy economy, success and failure are spread around everywhere.
"There is a meme growing that all electric vehicle companies fail, especially those that get government money," writes blogger Jon LeSage. "Granted, there are many troubled plug-in-vehicle-related companies, but some are successful. And if it's just failure we're interested in, then there are plenty of gasoline and automotive companies that are no longer in business, even when they got government subsidies."