Emerald Automotive Still Seeking The Green
It’s been a couple years since we first discussed hybrid car start-up Emerald Automotive. When we last left it, Emerald was debating whether it would pursue the (doomed) Aerotropolis tax credits of 2011 — in context, a very creative avenue of funding for a car company. Since then, updates on the very-much earthbound car manufacturer have been infrequent. The last article I’ve been able to find from a major Saint Louis daily was last January, and things weren’t looking good for the project.
The original timetable called for the Hazelwood plant to be producing vans by 2014, but that has been pushed back because the company is still searching for funding — about $160 million — to build the facility, Marble said.
In addition to some private capital, Emerald has received a $3 million loan from Hazelwood and $2 million from the Missouri Technology Corp., plus a $5 million grant from the British government’s Technology Strategy Board.
The company had hoped to snag a $100 million-plus loan from the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing Program, but withdrew that application last summer to pursue private investment options after federal energy loans stalled in the wake of the Solyndra controversy. Solyndra, a solar-panel manufacturer, went bankrupt after getting a $535 million DOE loan.
It’s never a good sign when your project, rightfully or wrongfully, gets lumped in with publicly financed boondoggles like Solyndra. The online publication Patch.com reported in July that Emerald says it will open its doors in 2015, with 600 jobs waiting in the wings. But as this process drags on, it begs the question: Is the Emerald project actually happening? I left a message with the Missouri Technology Corporation (MTC) to find out; I haven’t received a return call.
Fortunately, Hazelwood’s office of economic development was more helpful. Hazelwood indicated that after abandoning the Department of Energy’s loan program, Emerald indeed turned its sights to finding investments from the private market and had been giving demonstrations of their product to potential investors. Although Hazelwood did not have a figure for how close Emerald had gotten to its original $160 million goal, it was pretty clear that Emerald wasn’t exactly getting close — at least not yet. Hazelwood and the MTC could take possession of some of Emerald’s patents if the company goes out of business, but as the Mamtek situation reaffirmed, there’s no telling whether the patents are worth anything close to the public loans that supported the company. That should leave us all a little unsettled.
On the positive side, I was happy to hear that the company is turning its attention to getting investments from the private market. That’s how it should have been from the beginning, and how it should be going forward. Every itemized dollar of investment noted in the St. Louis Beacon article was related in some way to government funding. That’s not how capitalism is supposed to work.
Will Emerald find the green? Time — and hopefully, the market — will tell. We’ll keep you posted.