SANTA ROSA, Calif. — Electric vehicle pioneer ZAP has secured up to $25 million in new financing with Cathaya Capital L.P. ZAP says it will use a portion of the funding to pursue longer-term contract production and assembly commitments, and to accelerate deliveries of trucks and vans to fill current fleet and government orders.
Leveraging its expertise in the design and manufacture of electric vehicles, as well as its 15 years of experience distributing and selling 100-percent electric vehicles, ZAP said also plans to further broaden and accelerate its development of powertrain technology that improves overall performance of its vehicles while achieving cost reductions.
In making the announcement, ZAP CEO Steven Schneider commented: "This is a critical juncture for ZAP as we now have the means and resources to begin addressing the opportunities at hand on a global basis and to fully realize the leadership position possible in the electric vehicle marketplace."
Financing includes a private placement of 20 million shares of common stock for aggregate proceeds of $5 million and a secured loan facility of up to $10 million that will be advanced to ZAP provided certain conditions are met. In connection with the financing, the investor also was issued warrants exercisable for up to 16 million shares of common stock at 50 cents per share.
Dr. Priscilla Lu, general partner in the investment firm and found of Better World, an affiliate company, commented, "We made this investment in ZAP based on the belief that the new focus and resources now available to the company will allow it to become a market leader, fully realizing its potential and leveraging its long history and experience. We believe ZAP’s experienced management team has the in-depth, practical know-how in the electric vehicle industry that will provide the foundation to succeed in markets and partnerships in Europe and China."
The proceeds of this financing also will enable ZAP to expand its vehicle distribution network into the European Union (EU) where recent government incentives supporting the adoption of electric vehicles have increased demand for practical models at affordable prices. In addition to targeting market opportunities in the EU, ZAP intends to pursue automotive opportunities in China. Last month, the China Daily called for government incentives on the purchase of vehicles that reduce pollution and minimize dependency on oil. ZAP believes calls for a proposed mandate of this nature, together with the subsidies that are now available in China to electric vehicle manufacturers, have created opportunities for increased volume production and sales. In parallel, Better World intends to pursue the development of a charging network infrastructure for electric vehicles in China, by partnering with industry and technology companies that can offer practical solutions for fast recharging.
This investment brings a total of up to $31 million in new financing for ZAP’s electric vehicle capital expansion since June. In addition to the Cathaya package, up to $6 million in financing was placed by the Banks Group in June consisting of $2 million in cash and $4 million in warrants at 50 cents per share.
