Industry News: Carbon Motors Closes Up Shop

[William Maley]

William Maley

Staff Writer - CheersandGears.com

June 19, 2013

Another automaker bites the dust. Carbon Motors, the company behind the futuristic E7 police vehicle has filled for chapter seven bankruptcy (i.e. liquidation) last Friday.

The Indianapolis Business Journal says the company's bankruptcy paperworks lists liabilities of $21.7 million and assets of just $18,976. Those assets include one E7 prototype, some furniture, books, and intellectual property.

Carbon Motor's business plan hinged upon getting a $310 million loan from U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program. Last March, the Department of Energy declined their application. CEO William Santana Li said at the time the company was a victim of politics and would be looking elsewhere for money. It seems their search didn't work since there has been radio silence and the company quietly pulled out of its plant in Connerville, Indiana back in April.

“The entire business model was premised on that entire loan coming through. It was a huge, unexpected disappointment for management as well as the investors,” said Henry Efroymson, a partner at Ice Miller LLP, who is representing Carbon Motors.

Many of the liabilities in Carbon Motor's filling are from investors and suppliers, such as BMW which would have supplied a diesel engine for the vehicle.

The chapter seven bankruptcy also gives the company protection from any litigation brought against the company, such as three former executives suing the company for unpaid wages.

Source: Indianapolis Business Journal, 2

William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.

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[G. David Felt]

Bummer as that was a freakin cool car. I suspect another Torpedo by the big auto boys not wanting someone who could actually bring something really good to the table.

[Drew Dowdell]

They never really had a chance

[Robert Hall]

I knew that one wasn't going anywhere..just smoke and mirrors, nothing really there.

[bobo]

It seemed incredulous that the company supposedly had so many pre-orders for the vehicles.

[Robert Hall]

It seemed incredulous that the company supposedly had so many pre-orders for the vehicles.

They probably made up the numbers...the whole operation seemed fake.

[Drew Dowdell]

They probably counted anyone who said "Hey, that's kinda cool!" as a potential sale.

[G. David Felt]

I wonder how long before someone buys up the intellectual rights to the whole project and actually has the cash to then bring it to market? Course with the amount of money they supposedly spent on this one prototype, I would have thought they could have built 50 of them.

[dwightlooi]

Trying to make and sell the perfect Police car is not a bad idea... but trying to go into automobile manufacturing from scratch in this millennium was a leap too far.

The integrated siren lights. The hose washable rear compartment. The suicide doors and plastic body (dent resistant). The integrated dispatch, radio and recording systems. All were great ideas police departments are willing to pay for. But, really, do you really need to build a platform and an automobile from the ground up to have these? Not really.

Carbon should have bought contracted GM or some other existing manufacturer to build a run of custom vehicles on their existing factories and platform. Say an Alpha or a Zeta, with plastic fenders and door panels, with a roof that accomodates built-in (flush) siren lights, get L-3 or Motorola to cough up an integrated dispatch data computer, radio and DVR system. Then sell it. Own no factory, engineer no new platforms. Heck, do it as a equity partnership with an automaker to create a dorminant police car product that will replace the Caprice, Charger and Tauruses -- all of which left much to be desired and are easy targets.

In fact, they already had substantial letters of intent from enough customers to get it started. Trying to buy your own factory and make the cars yourself is simply a poor way to get started!

[GMTruckGuy74]

All these failing automotive start-ups remind me of the Tucker story. Those who don't learn from history are doomed to repeat it

[G. David Felt]

All these failing automotive start-ups remind me of the Tucker story. Those who don't learn from history are doomed to repeat it

Too True as to my comment about they should have been able to build 50 of them for the millions that went into this project.

[Robert Hall]

This brings up the question--what was the last successful independent automaker that was launched? (not the launch of new brand/division of an existing mfgr or a result of a merger). It's a tough, expensive business to try and survive in..I can think of a few that tried and failed in my lifetime (Bricklin, DeLorean, Fisker, etc)

[G. David Felt]

This brings up the question--what was the last successful independent automaker that was launched? (not the launch of new brand/division of an existing mfgr or a result of a merger). It's a tough, expensive business to try and survive in..I can think of a few that tried and failed in my lifetime (Bricklin, DeLorean, Fisker, etc)

I think you would have to go with the Communist Cherry Corporation that just clones everything brought to china from Europe or the US and puts a cherry badge on it.

[Robert Hall]

This brings up the question--what was the last successful independent automaker that was launched? (not the launch of new brand/division of an existing mfgr or a result of a merger). It's a tough, expensive business to try and survive in..I can think of a few that tried and failed in my lifetime (Bricklin, DeLorean, Fisker, etc)

I think you would have to go with the Communist Cherry Corporation that just clones everything brought to china from Europe or the US and puts a cherry badge on it.

That's actually 'Chery' w/ one 'r'. I wasn't thinking of China, though, they've had dozens of companies started there in recent decades, like the US was around 1910. Nothing of significance outside of China yet.

I was thinking of US companies...can't think of anything... if Tesla makes it, it will be quite an achievement.

Edited June 21, 2013 by Cubical-aka-Moltar

[G. David Felt]

This brings up the question--what was the last successful independent automaker that was launched? (not the launch of new brand/division of an existing mfgr or a result of a merger). It's a tough, expensive business to try and survive in..I can think of a few that tried and failed in my lifetime (Bricklin, DeLorean, Fisker, etc)

I think you would have to go with the Communist Cherry Corporation that just clones everything brought to china from Europe or the US and puts a cherry badge on it.

That's actually 'Chery' w/ one 'r'. I wasn't thinking of China, though, they've had dozens of companies started there in recent decades, like the US was around 1910. Nothing of significance outside of China yet.

I was thinking of US companies...can't think of anything... if Tesla makes it, it will be quite an achievement.

Agree with you on Tesla, it will be a big achievement if they make it. I wonder how long before someone consumes them?

[Drew Dowdell]

This brings up the question--what was the last successful independent automaker that was launched? (not the launch of new brand/division of an existing mfgr or a result of a merger). It's a tough, expensive business to try and survive in..I can think of a few that tried and failed in my lifetime (Bricklin, DeLorean, Fisker, etc)

Tesla?

[Robert Hall]

This brings up the question--what was the last successful independent automaker that was launched? (not the launch of new brand/division of an existing mfgr or a result of a merger). It's a tough, expensive business to try and survive in..I can think of a few that tried and failed in my lifetime (Bricklin, DeLorean, Fisker, etc)

Tesla?

Yeah, that's the current one...trying to think of the last successful one..probably have to go back over 100 years to Hudson with later merged w/ Nash to form AMC. Or Packard, which had nearly a 60 year run...

Edited June 26, 2013 by Cubical-aka-Moltar

[G. David Felt]

I do not see any future companies getting into the auto business unless it is with a hover car or some other flying futuristic auto that would force the established ones to finally move forward to a different product model.