Last Updated May 5, 2010 4:16 PM EDT
According to its SEC filing, Wheego is seeking to sell equity and raise $5 million. That money, which the company hopes will be in new investment from clean tech funds, will cover the cost of producing the first batch of approximately 200 cars, CEO Mike McQuary told me in an interview. "We need investors to take us across the finish line," he said. "We were a risky proposition three years ago, but now we're on the home stretch." McQuary talked to The Deal about the company's finances last October:
Wheego is hardly an auto industry monolith: A 2009 spinoff of Ruff and Tuff Vehicles (which makes electric ATVs) it has just five full-time employees, and contracts out its major services, including the car's body and chassis (which started life as the conventionally powered Shaunghuan Noble), the batteries (from California's Flux Power) and assembly (Hi Power in Ontario, California). Operating from a small office building in Atlanta, it can't be accused of loading on the overhead, and that's one reason it's looking for only $5 million (and not 10 times that much).
While the company is beating the bushes for tech funding, McQuary said, the two-seat car will be put through crucial crash tests in Wisconsin. "We're going to put some metal against concrete and see what happens," McQuary said. "We did well in computer simulation at the University of Maryland, but in the real world things happen that you couldn't have foreseen, no matter how much simulation you do."
McQuary is a car executive by way of the computer industry -- he guided Internet provider Mindspring through its merger with EarthLink (which became the second-largest ISP) in 1999, then founded a record company (Brash Music, also in that Atlanta building). He has diverse interests, but seems determined to make the Whip Life an early contender in the EV sweepstakes.
Chinese manufacturers are great copyists, and Shuanghuan was accused of ripping off the Smart car for its design. But the Chinese company won that suit in a Greek court, which said that "an informed buyer" would not confuse the Noble and the Smart fortwo. "The geometry is similar," McQuary said, "but there are dramatic differences -- our car is a lot bigger." The Whip Life has a 28-kilowatt-hour lithium-ion battery pack, a 60-horsepower electric motor made in Wisconsin by Leeson, 80 to 90 miles of range, and a top speed of 67 mph.
The Life will sell for $33,500, which makes it slightly more expensive than the five-seat Nissan Leaf. Wheego will have to work hard to make its car a better proposition than the Leaf, which is already benefiting from television advertising. Being on the market first might help. Like the Leaf, the Life will be cheapest in California ($21,000) because a $5,000 cash rebate there joins a $7,500 federal income tax credit. "Those subsidies and the ability to drive alone in the HOV lane will drive sales for us in California," McQuary said.
The company, which has sold 250 of the $19,000 low-speed version of the Whip (half in Oklahoma, which offers lucrative subsidies) hopes to sell 2,000 full-speed cars in 2011. McQuary says the company will be profitable if it can reach that goal.
Photo: Jim Motavalli