Li-Ion Motors, a recent winner of the Automotive X PRIZE, has just told me that they need the prize money in order to pay their settlement in my law suit against them. I have been blogging about the case for over a year now (The Electric Lemon). To make a long story short, this company sold me a very poorly made car that is, in the opinion of many people, dangerous to drive. After trying to resolve a myriad of mechanical and safety problems I gave up and asked them to buy the car back.

Li-Ion Motors said, “see you in court”. Thus, I sued them under breach of warranties, Song-Beverly Act (Lemon Law), False Advertising, and the Consumer Legal Remedies Act. As of September 15th, 2010 we settled in San Mateo court in California in my favor.

Buying their “vehicle” was the start of a personal quest to experience the nuances of driving electric cars. I wanted to see if I could operate my life without the thrust for oil. My quest was derailed by this company. Finally, closure! I can move on right?

Wrong! The settlement was pretty simple (it’s attached at the bottom of the page), they were to pay for the cost of the car and some of my legal expenses. I ended up out-of-pocket about $9,000. I was to supply the title and a release and they were to wire the money by October 5th. After the payment was made, they were to pick up the car. If they did not do that, I am entitled to a $100,000 judgement against them. This was to be completed October 5th, 2010 which has come and gone.

On October 5th they wired $20,000 of the total $75,000. This was not the settlement we agreed to and they are asking for another 30 days to pay the balance. Their lawyer emailed and said:

“As you know, today is the date by which full payment of the settlement was due. I have called you to inform that Li-on does not have the full assets to make payment. By way of background, on the day of the settlement conference, Stacy Fling the CEO was in Washington D.C. to receive the Progressive Insurance X-prize. This prize is valued at $2.5mil. At the time of the award and our contemporaneous settlement, Li-on was lead to believe that it would receive prompt payment of the award, and thus be able to fulfill its obligation under the settlement.”

This is where I want to slap them, wow, they are using the X PRIZE winnings to pay for the settlement? Are you kidding? This just seems so wrong and against the spirit of the contest in the first place.

Their lawyer also made a slight (in my opinion) threat that if I did not accept their terms: “As we know, defendant is an out of state corporation, and a judgment entered in California would need to receive sister state recognition, and then enforcement.” Now granted he is right, but it sure does not instill faith that this company (with its history) will act ethically.

Using their legal slight of hand, they’re saying if I don’t wait under their new terms, the judgment would be ignored until it was enforced. What is worse, the prize money, which should be used to create new and thoughtful green innovations would in a small fraction end up in my bank account — which is very sad and upsetting to me.

If they did not pay by October 5th they were to have a $100,000 judgement slapped on them. However, given they paid some of the settlement, getting the judgement is now more difficult. I suspect their lawyer instructed them to do this. So, left with no real other options (other than months if not years more court time) we’re allowing them 30 more days to pay, which apparently is how long it will take them to get the X PRIZE money. — I want to scream –

Li-Ion Motors, EV Innovations, Hybrid Technologies (all the same company) are harming the integrity of the electric car industry and the integrity of the entire notion of innovation in electric vehicles. These vehicles should be the way the world gets off of oil, and now due to these crooks, people are may be timid to try better electric vehicles.

To be honest, I have no idea how they won the X PRIZE in the first place. It’s a shame because I bet there were better designs and more deserving companies and teams than Li-Ion Motors. After we settled the law suit I thought they would do the right thing and live up to their legal responsibilities, but now I don’t think they even know what the law is. They probably think it’s okay to pay a fraction of what’s owed, build cars that do a fraction of what they advertise, all because they are drinking their own koolaid.

Simply put: Companies like Il-Ion Motors are killing America’s ability to innovate.

Attachment: Copy of the Settlement Agreement between myself and Li-Ion Motors.

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