The X Prize Foundation has sent the last portion of its $10 million automotive prize to Li-Ion Motors Corp., the winner of its "alternative side-by-side" category.
Li-Ion Motors has indicated it needs the money to pay a $75,000 settlement with a customer who said his electric car would not start when it was delivered and never worked properly.
Also awaiting the disbursement of the $2.5 million award are the company's three "side-by-side" finalists. Just before the final, tie-breaking competition in July, the four companies signed an agreement to share the award, no matter who won (Greenwire, Oct. 18)
"The money has now been disbursed," said X Prize Foundation spokeswoman Carrie Fox. "The foundation processes one team at at time, and this one happened to be last."
The goal of the Automotive X Prize is to spark the development of super-efficient cars that can be manufactured in large volume.
In a detailed look at Li-Ion (prounced "lion") this week, Greenwire found the company's ability to mass produce a car might be in doubt (Greenwire, Oct. 27). Attempts to reach Li-Ion Motors, its fellow finalists and Lyon were unsuccessful this afternoon.
Court documents, interviews and the company's regulatory filings with the Securities and Exchange Commission show the company has vacuumed up $50 million from stock holders in 10 years with little to show for it until the Sept. 16 X Prize ceremony.
Li-Ion Motors owes more than $250,000 to the IRS for unpaid payroll taxes. Company management has twice been investigated by the SEC. A 2008 lawsuit accused the company of operating a "pump-and-dump" penny stock scheme before the suit was dismissed for lack of jurisdiction. And the company is currently appealing a cease-trade order issued by Canadian securities regulators who allege it broke a rule targeted at flagging companies that engage in "abusive practices" in the penny-stock market.
In the tie-breaker, Li-Ion's margin of victory was less than two-tenths of a second in a 100-mile energy and performance run on a Michigan track in July. Five entries achieved an average of at least 100 mpg or the equivalent (all were battery-electric vehicles).
Leaders of the five teams hand-drafted an agreement on the page of a spiral-bound notebook stating that whoever won would keep $1.7 million but share the rest according to an agreed-to formula.
"If my team wins the competition, I agree to share the prize in the following fashion," states the simple contract.
One of the finalists, RaceAbout Association of Finland, did not sign the agreement. RaceAbout came in second in the competition but is not sharing in the prize money.
The German team TW4XP is to get $400,000. ZAP of Santa Rosa, Calif., and Aptera of San Diego tied and are each to receive $200,000.
Also awaiting the award is San Mateo, Calif., technology CEO Barrett Lyon who settled with Li-Ion on Sept. 16, the day the company was awarded the X Prize.
Lyon bought his LiV Surge, a converted PT Cruiser, in 2008. First it was delivered late. Then it would not start, according to the lawsuit he filed in California. Lyon had to pay for it to be towed to his home.
The car sat unused for two months. After two visits by a technician from North Carolina (the first technician did not have the parts to fix a defective battery cell), Lyon says it runs, but takes 40 hours to charge when it is supposed to take eight. It was supposed to go 120 miles on a charge but goes less than 80.