Fenix Power - Took money and but never delivered

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i believe that this is a real deal and my 2011 is scheduled to be a test mule for them. I think this is going to be a killer product, but long wait for sure.
 
badq45t said:
i believe that this is a real deal and my 2011 is scheduled to be a test mule for them. I think this is going to be a killer product, but long wait for sure.

long wait? When did you decide to get a VW? :lol:
 
JohnBysinger said:
And I assure you, every deposit will result in either an installation or a refund.
Talk is cheap. Put the deposits in a secure escrow account.
 
SageBrush said:
Put the deposits in a secure escrow account.

Absolutely! Currently, it's simply a separate account, however, we're investigating blockchain based smart-contracts as we're using blockchain for other parts of our backend software for the service. Before we get to market we'll have our site off of the current WordPress/commerce platform we're using today and have our own service backend to manage everything, including escrowed deposits and refunds. Note: when I state blockchain, yes this is the same technology that drives cryptocurrencies like BitCoin, however that does not mean we will be tying customer funds to the (still volatile) crypto-coin markets. Blockchain can be used without the 'coin', and smart-contracts essentially work identically to escrow with regards to protections. I know, more words, if you need more assurance, I invite you to be a bit patient with us, follow us, and come back later when we have much more to show you!

-John
 
SageBrush said:
Ahem.

A block-chain is NOT inherently an escrow.

You're correct, it's not even close to escrow. However smart contracts built upon a blockchain platform can be set up to work identically to a managed escrow account. Here's an example of how smart contracts are used in an escrow scenario:

https://medium.com/coinmonks/escrow-service-as-a-smart-contract-the-business-logic-5b678ebe1955

Now, in that example, they're using an Etherium based transaction. but it can be applied to dollars in several ways. The strength of a blockchain based smart contract is the transparency, the ruleset, in this case, an escrowed transaction, is publicly visible, replicated over a distributed system, which in turn makes it effectively permanent and indelible. Of course, escrow is just one fintech application that can be embedded into smart contracts, and a smart contract can exist within a larger scope blockchain.

I apologize if my first discussion of smart contracts gave the impression that blockchain IS a smart contract. I've found whenever I bring up Blockchain, there is a wide range of knowledge on the topic, and sometimes misconceptions about what it is and how it works. So I tend to start such conversations a bit over-simplified and then work from there.
 
With all respect due, blockchain is besides the point.

Is the deposit money walled off from the risk of BK ?
As you have portrayed things thus far the answer is no, and techno jargon does not change that fact.
 
BK? I assume you mean Bitcoin here? Yes, we'll be completely separate from bitcoin, and instead (if we decide to include the financial portion of the business in a blockchain architecture) be using a public fin-tech smart contract service, which there are several and more coming. Again, we're evaluating that as an option, as the fintech applications are still in a growth phase, and traditional banking institutions are still investigating it themselves. For example if a trusted traditional banking institution (Think MasterCard or Bank of America or similar) offers a smart contract application that's tied to traditional bank accounting and has a workable API, we'll move forward with that.

But in parallel, we are developing our own blockchain application for our battery system to record the service history (things like charge/discharge, temperature, physical impact events, etc) into a record we can use to certify or disqualify our cells for 2nd market use when we bring them out of EV service. That will have absolutely zero ties to bitcoin or any other 'coin' application of blockchain. It's simply a distributed ledger for recording data. It's because we have some good blockchain engineering talent that we're considering its use for the financial pieces, their expertise gives us good insight on the viability of the products currently available and coming in that field.
 
I re-read your last comment, and it occurs to me that by BK you may mean Bankruptcy?

Even if that's not what you meant, it is relevant, so I'll address that as best as I can as well. Due to the nature of our incorporation, the status of our fundraising efforts, and the SECs rules related to both, I can only share so much. But I think this may help:

As of today, the business is completely debt-free other than these deposit obligations that we're discussing here. Meaning that under bankruptcy, those debts are priority. I've self-funded our efforts for the last 4 years from my own savings and income, and have not used personal debt to finance the business either. Everyone involved to date is currently compensated via equity contracts with zero-pay clauses if funding efforts fail. Again we are in an active funding round soliciting accredited investors. When this round closes, the obligations I just stated above change, but we'll be able to move forward with the formal protections you expect. These will be documented and disclosed to all of our reservation holders, and they will have the option to opt-in or out of those terms at that time.

Now that said, I do need to emphasize, we are a startup, we are building a costly product built on a variety of technologies, in a new and somewhat uncertain market. Your skepticism is absolutely appreciated, frankly, it's expected, and supported by the graveyard of other businesses that have attempted entry into battery solutions in EVs. Heck, just looking at Faraday Future can tell you that even a well-funded venture has risks.

But I would also like to emphasize that I'm passionate about building this business, and the feedback I've received from the community is that someone needs to fill this need and Nissan simply isn't doing enough. Electric vehicles have been on my mind ever since, as a kid, I watched the 70's oil crisis on the news and looked at my toys and wondered why "real cars" didn't just use batteries. The roots of my exploration of building an EV related business myself started 12 years ago when I was converting a 1969 Triumph Spitfire to electric and found aftermarket suppliers in the field horribly thin. It may just be words on a forum, but the business commitment to the refundability of the deposits is backed by my personal passion and integrity that I'm putting into this. I see everyone else's passion and am frankly amazed by everyone's willingness to contribute and help others, I see it daily in EV forums everywhere. Without our customers we have no business, they're putting their trust in us in the form of reservations currently, and that is something I take very seriously.
 
JohnBysinger said:
we are in an active funding round soliciting accredited investors. When this round closes, the obligations I just stated above change, but we'll be able to move forward with the formal protections you expect.
I'll skip on "accredited" since I do not care but I'll summarize my understanding of what you have written:

Presently deposits are not secured or walled off from BK. You may change that if investors put money in your company.

Fwiw, I am not posting to be skeptical. I would however like people who have already given you deposits or are thinking about it to understand that they risk losing their deposit in total and will have no recourse. I think you should escrow those deposits, and I personally would not give you a deposit without escrow.
 
I make no claims that there's no risk. I'm certain I articulated that in my replies above. What I have said is I'm staking my personal reputation on the promise to make good. Now you have never met me, so of course, you have no yardstick by which you can assess my word or my reputation directly. You can "google" me, look at me up, find people who know me, I've got over 800 direct contacts on LinkedIn, I'm not hiding who I am. But I also do not expect you to shoulder that responsibility either, in fact, quite the opposite, I hear your concern very clearly. It has me planning conversations with our corporate attorney to find out the legality of what I can and can't disclose about our financials, and what tools are available to provide genuine certification of the protections you seek. Because you're absolutely correct, words are words.

As CEO of a startup, I wear a great many hats, relevant here I shoulder risk, and I make business decisions that impact the business, the bottom line, our customers, and our reputation. Two of those decisions were: don't take on debt until we have sufficient momentum to shoulder the note, and the other was run the business as lean as possible while fundraising. Choosing to focus our resources where it's important, and opting out of others where the cost/benefit equation doesn't balance out.

Escrow comes with a cost. We have 3 options in this space (ignoring the smart contract discussion before), a traditional banking escrow agency, the largest and original online escrow service through PayPal, and other online PayPal competitors. The last option, companies like escrow.com and others have a minimum transaction that they will process, usually between $500 and $1000, so they're not an option. PayPal over the last several years has a severely damaged reputation for customer service in escrow dispute cases, and while they do manage escrowed transactions for sites such as Ebay, it's not just a checkbox for us to apply it to our transactions. This leaves us with the most expensive option, a traditional escrow company, and hiring headcount to manage the paperwork involved with escrow transactions for each individual deposit. That would be the opposite of running lean, and could even cost more than the sum of every reservation made to date.

So I've made the choice to keep our resources focused where they are most useful at this time. And I'm confident that many customers would agree that keeping our expenses in check is a smart business decision, and importantly I know that accredited investors agree.

Something you may want to consider in this discussion, does Tesla escrow its reservations? The answer may surprise you.

See item number 4 here:
https://www.tesla.com/sites/default/files/pdfs/model_3_reservation_agreement.pdf
 
JohnBysinger said:
Something you may want to consider in this discussion, does Tesla escrow its reservations? The answer may surprise you.
No surprise to me -- I knew it when I placed my deposit. I also know Tesla's history. And to put things in some perspective, you are not Elon Musk and Fenix is not Tesla. I'm not trying to insult you, but the comparison is off by no less than six orders of magnitude. Tesla had already invested about $1B in R&D before they took down a deposit.

-----
I'll be delighted to be proven wrong but the more I read your posts the more I think you are hawking vaporware.
 
JohnBysinger said:
Escrow comes with a cost. We have 3 options in this space (ignoring the smart contract discussion before), a traditional banking escrow agency, the largest and original online escrow service through PayPal, and other online PayPal competitors. The last option, companies like escrow.com and others have a minimum transaction that they will process, usually between $500 and $1000, so they're not an option.
I took a minute to look at escrow.com.
If I understand correctly the charge is the greater of 6.5% or $10 so you can escrow a $150 deposit for $10.

If you do not have $10 to cover a deposit, how in the world are you going to pay for the engineering resources needed for R&D ? Please do not try to insult our intelligence by saying that you are the engineering brains. Your LinkedIn profile makes it crystal clear that is not the case. And as for facility and tools, I'll venture a guess that they currently are a PC and an internet connection.
 
SageBrush said:
No surprise to me -- I knew it when I placed my deposit. I also know Tesla's history. And to put things in some perspective, you are not Elon Musk and Fenix is not Tesla. I'm not trying to insult you, but the comparison is off by about six orders of magnitude.

The comparison is quite valid, even with the difference in scale. Let me explain:

Tesla took in several billion dollars in deposits on the Model 3, which weren't escrowed, they were spent on the development and production of the car (or elsewhere in Tesla, there's no way to really tell.) And despite those billions, Tesla's stock investments, more billions in loans, their house of cards came perilously close to collapse. Elon confirmed this. "Single digit weeks":

https://www.forbes.com/sites/christopherhelman/2018/11/28/elon-musk-said-tesla-was-single-digit-weeks-from-deathwheres-the-disclosures/#1fbb8e0a6212

Now we all know they didn't, but if you're assessing risk from an actuarial point of view, your deposit had a very high risk associated with it. And you knew it, and that's ok because again, you're absolutely correct, Tesla has Elon. And he has an excellent track record of problem solving and success. But if the collapse were to happen, those deposits would evaporate, even with Elon's net worth, there's no way he could personally cover them either.

For Fenix? Even if you assume some kind of horrid worst case scenario, fire, death, lawsuit, whatever, We've accepted 4 figures in deposits, Even if Fenix burns to the ground, I have multiples of that in physical assets I could liquidate and make right with my customers, and I would. This is why I'm being as brazen as I am about how I am staking my personal reputation on repayment or delivery. Because I know that I can. Heck, I could get a job at Wal-Mart and pay everyone off in a month or two, and if it came to that, I would.

So I argue that while you're correct that Fenix is not Tesla, with regards to the security of our deposit vs one for the Model 3, I submit that our risk is lower than theirs ever was.


I do want to shift the focus a bit though, you wanted me to know this wasn't meant as an insult. First, thank you for that, but I don't take it as one. I welcome the discussion! I'm very much aware that I'm not Elon Musk, and can't sit on my PayPal, SpaceX and Tesla laurels and point at many well known and public successes, and you can't step foot into working in the EV sector without that comparison at some point. So I'm doing the one thing I can do. Engage in conversations with people like you who have questions and concerns. I'm putting myself out there as much as I can. Even while I know I'm addressing this reply to you, I'm certain there are a dozen or more silently reading this. So, of course, I choose my words carefully, but I don't hold back. Because all of you need to get to know me, and right now this is the best way you can.
 
JohnBysinger said:
Tesla took in several billion dollars in deposits on the Model 3, which weren't escrowed, they were spent on the development and production of the car (or elsewhere in Tesla, there's no way to really tell.)
This is incorrect. The Tesla financial statements make it very clear that the deposits were not spent and were not counted as assets. And if we care about some semblance of accuracy in what we post, the deposits amounted to ~ $600 million
 
You are indeed correct about the scale/total of the deposits, when replying I couldn't remember if the deposit was 1 or 2,000, and I knew reservations were north of 250-300,000, in my haste I added a zero in a rough estimation. Admittedly I haven't looked closely enough at their financial statements to see what you're stating about the deposits. But one thing is certain, Tesla's yearly operating cost is close to $20B, or a little more than $1B per month. If Elon stated Tesla was within "single digit weeks" of locking up, that puts it pretty darn close to that $600M number, perhaps they didn't touch it, but it still came perilously close to.
 
SageBrush said:
JohnBysinger said:
Escrow comes with a cost. We have 3 options in this space (ignoring the smart contract discussion before), a traditional banking escrow agency, the largest and original online escrow service through PayPal, and other online PayPal competitors. The last option, companies like escrow.com and others have a minimum transaction that they will process, usually between $500 and $1000, so they're not an option.
I took a minute to look at escrow.com.
If I understand correctly the charge is the greater of 6.5% or $10 so you can escrow a $150 deposit for $10.

If you do not have $10 to cover a deposit, how in the world are you going to pay for the engineering resources needed for R&D ? Please do not try to insult our intelligence by saying that you are the engineering brains. Your LinkedIn profile makes it crystal clear that is not the case. And as for facility and tools, I'll venture a guess that they currently are a PC and an internet connection.

Isn't this being a little harsh? $10 per deposit would mean an escrow cost of $10,000 for every potential 1000 leaf customers. There are tens of thousands of leaf's that could potentially make use of a third party battery.

Although your concerns about a customer's recourse during bankruptcy is valid, so is John's cost argument with using an escrow service.

I would like Fenix to have a chance to succeed, but I'm not a buyer, because I'm not a fan of the lease model, nor do I need a replacement battery anytime soon.

Perhaps a Kickstarter campaign would be in order?
 
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