Detroit Electric Returns, Again

The story in yesterday’s Detroit Free Press sounded promising: A new electric car maker, with a revolutionary new electric motor, would revive the venerable Detroit Electric brand and start selling electric cars by the end of next year. It plans to sell 30,000 cars globally in its first year, ramping up to 270,000 by Year Three.

The company, the story said, was negotiating with Proton—the Malaysian automaker owned by the country’s government—to build cars for it. Detroit Electric’s CEO, Albert Lam, was formerly CEO of Lotus Engineering, the consulting and development arm of famed British carmaker Lotus, which Proton has owned since 1996.

The article didn’t point out, however, that Detroit Electric had already been revived once, by a California electric car company with a controversial history.

Detroit Electric’s first life actually ran from 1907 to 1939, when it sold electric cars made by the Anderson Electric Car Company. Last year, the brand was reestablished as a joint venture between Chinese transit-bus manufacturer China Youngman Automotive Group, owning 51 percent, and California electric vehicle maker ZAP, which had 49 percent. That may raise an eyebrow or two. ZAP has had many incarnations and a rapidly changing product line—chronicled last April by Randall Sullivan in a scathing Wired article, “Hype Machine: Searching for ZAP’s Fleet of No-show green Cars.”

One Brand Name, Two Entities

Last fall, Zap announced it would use the Detroit Electric brand to sell a three-wheeled, 322-horsepower two-seater called the Alias. Now, Zap and China Youngman Automotive Group have agreed to sell their stakes in Detroit Electric to new investors, specified as “a vehicle distributor and additional technology partners” who intend to provide both financing and technology for the venture. That new venture is the Detroit Electric that the Free Press says will receive $300 million of investment over five years from Dutch, American, and Malaysian backers.

Zap CEO Steve Schneider told the plan had always been for Zap to sell its stake in the Detroit Electric manufacturing arm as new investors came along. In exchange, Zap retains 100 percent of rights to use the Detroit Electric brand for its products and will continue to own original drawings and other historical artifacts from the 1939 company, he said. That company also owns exclusive rights to distribute Detroit Electric vehicles in North America. In addition, ZAP received $750,000, according to the press release. To make matters even more confusing, Albert Lam—the chief executive of the Detroit Electric that will manufacture vehicles—remains on ZAP’s board of directors, which he joined last October.

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  • Bryce

    It is interesting to see an old brand name sake being revived for modern electric vehicles, it is kind of fitting.

  • Scott Mackey

    I am very skeptical about anything with Zap in the ownership chain. Read the Wired article referenced in this article and you will see. They seem to be playing with companies, designs (real or not) , and already existing technology to create a big ponzi scheme or shell game that ends with them grabbing investor dollars to line the exec’s pockets.

    That said, I am a sucker for any story the gives a hope that we’ll be tooling around quietly in electric vehicles, especially if it means we can actually go somewhere that isn’t within 50 miles of the house.

  • Anonymous

    I fail to see how any investors are interested in zap. Their products are either unsafe and impractical or unattainable concepts that would never meet their price points. Why doesn’t all this investment go towards companies who have quickly and successfully developed innovative vehicle that actually exist. Aptera and a all electric Smart car sound like good investments compared to Zap.

  • Bryce

    zenn looks like it has great potential. I sure would enjoy hundreds of miles of electric range with a 5 minute charge. It will especially be interesting if big companies license the tech so that it can be released to the masses at cheaper prices.

  • Jason

    I had no idea the Zap company was so scandalous, I’m glad I read that Hype machine article. Sad, I would have like to see them succeed, good thing I didn’t invest

  • John Mansfield

    I met Albert Lam when he was CEO of lotus Engineering. We discussed a project (google: Motorsport University Malaysia) that would include Lotus as a partner.
    Albert was polite and professional. His knowledge of Lotus history and engineering projects were not as extensive as I had expected. However, he was very much a venture capitalist. How revenue could be made and sustained were questions he was very interested in.
    I am not surprised he has left Lotus and gone out on his own.
    ZAP are very much into getting investors on board. Albert under the Detroit Electric banner will I’m sure have a compelling business case in his hand to encourage people and institutions to hop on the roller coaster ride. I hope they are not disappointed. Ecologically derived power is a noble venture.
    John Mansfield

  • Shines

    Ecologically derived power is a noble venture. All the more reason to be very sceptical and avoid dealings with an ignoble company like ZAP.


    Just another Chinese company hiding behind a American Brand Name.

  • thomatt12

    I agree that it is interesting to see an old brand name being revived for modern electric vehicles. Let us just wait and see what they can contribute to the market, may it be hydrogen gas saver cars, hybrid, or electric cars. It will surely be exciting.