By Allan Maurer
ATLANTA – Wheego Electric Cars, which launched its two-seat vehicle, The Whip, earlier this year, is raising a $2.5 million financing, according to a regulatory filing.
CEO Mike McQuarry, formerly president of Earthlink Inc., tells TechJournal South the raise will finance the federal crash testing neccessary before the company can market its highway speed car.
The company spun-out from Ruff & Tuff Electric Vehicles in 2009, raised $1.2 million debt in August from existing investors. Investors can later ask for repayment of the loan or convert it to stock, says McQuarry.
It disclosed the plans for the $2.5 million raise in a filing with the U.S. Securities and Exchange Commission.
McQuarry says he expects new investors to contribute to the $2.5 million raise.
The company will use proceeds from the new funding to finance federal crash testing requirements. “Then, if we have any left, we’ll begin development of a 4-seat model,” McQuarry says.
The first version of the Whip has a maximum speed of 35mph and retails for about $19,000. It takes about eight hours to charge via a conventional outlet. A dual charger that uses an outlet similar to one used for a home clothes dryer, would do the job in about 40 percent less time.
The first Whip went out the door about two weeks ago and people are already buying them, says McQuarry.
A full-speed vehicle planned for 2010 would have a lithium-ion battery and be able to travel at 65mph. It would retail about about $29,000. It would require a 12-hour charge from a conventional outlet. “We expect most buyers will opt for the dual charge option,” says McQuarry. That would require 5 hours for a full recharge.
McQuarry says that buyer in Oklahoma, which offers a 50 percent tax credit to electric car, who would also receive a federal tax credit, would pay only about $2,500 for the low speed Whip.
McQuarry has said the five-employee company expects to sell about 1,000 units of the low speed version of the Whip the first year and about 5,000 units of the full speed version.
The first version is for a niche market since it can’t be operated on highways and is limited to streets with 35mph speed limits.
The company is making the cars at an Ontario, California facility. As demand ramps up, McQuarry says the company would also use assembly plants in the Midwest and on the East Coast.
McQuarry says he sees some similarities in running both Wheego and Earthlink. “What rings similar to me,” he says, “is that there is a big opportunity for a small company to come into an industry crowded with monolithic corporations.
“We’re very in tune with our customers. They can pick up the phone and call me.” That, he says, is what distinguished Earthlink from AT&T or AOL. “We heard nightmare stories about customer service from them, waiting an hour.
“Here, we want happy customers. If something goes wrong, we want to make it right. Word of mouth is very important to our company.”
Online: www.wheego.net
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