Published on May 21st, 2014 | by Christopher DeMorro2
Smith Electric Gets $42 Million Grant To Keep The Company Going
May 21st, 2014 by Christopher DeMorro
Originally published on Gas2.
After stopping production due to a lack of profitability, EV truck maker Smith Electric has been granted a $42 million lifeline to keep the fledgling company going. The investor is Chinese battery developer and builder Sinopoly, which under the deal will become Smith’s sole battery supplier. Will this big bet pay off?
Smith Electric has had some success in delivering vehicles to corporate giants like Coca-Cola, FedEx, and even the U.S. Marines, but those sales were heavily subsidized, and a lack of return customers meant a lack of capital. Unlike Fisker though, which languished in bankruptcy limbo for over a year, it took less than a month for an investor to swoop in with cash to get the business up and running again by mid-summer. The $42 million investment gives Sinopoly approximately a 19% slice of Smith Electric, making them the largest shareholder, and it has intentions of importing the zero emissions trucks to China.
Sinopoly is holding to gain a foothold in the increasingly-relevant electric vehicle field, and Smith Electric is well positioned to become a leader in commercial EV sales. Right now the problem is costs, and being part-owned by a battery maker may have its perks, as Smith Electric will move away from current suppliers A123 Systems and Valence. Sinopoly will provide batteries, as well as other EV components, as the preferred supplier.
One thing that won’t carry on is the Smith Electric name, as the Sinopoly investment carries with it the new moniker of FDG Electric Vehicles Limited. Anybody got a good acronym for FDG?
Source: Kansas City Journal
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