Photo: Lightyear
One of the main assets any company can have is trust. When it says that it will do something, those who believe it are the ones who help it achieve its goals. Lightyear promised it would manufacture the Lightyear 0. It said the car would help it earn money to fund the development of the Lightyear 2, which looked like a master plan to reach mass production. On January 23, things changed: the Lightyear 0 is no more.
Lightyear’s main excuse for the decision is that it had to focus on the Lightyear 2, a car that received 40,000 reservations from individual customers since the company started accepting them on January 5. The Dutch startup also said it already has “approximately 20,000 pre-orders from fleet owners,” and Arval alone wants 10,000 units. None of that makes the cancelation seem less weird and unexpected.
The Dutch startup planned to produce 946 units of the Lightyear 0 at €250,000 a pop. The plans became more than just a promise when Lightyear announced that production started on November 30 at Valmet Automotive in Finland. The apparent explanation for stopping the vehicle production less than two months after it began is the most elementary and telling in the business world: there’s no money for it.
Lightyear said it asked a court “to open suspension of payment proceedings in relation to Atlas Technologies B.V.,” the company the Dutch startup created to take care of the Lightyear 0 production. This legal proceeding is used in the Netherlands by enterprises that do not have enough funds to make payments but still want to avoid bankruptcy. According to Fruytier Lawyers, “a provisional suspension of payment is granted straight away,” and the court appoints an administrator, who will check if the company is still viable.
Two to four months after the provisional payment suspension, the court promotes a hearing in which creditors can vote on a definitive deferment of payment. If the postponement is approved, the debtors have 18 months to fix everything.
Lightyear stresses that the suspension of payment is restricted to Atlas Technologies B.V. There are two other companies involved with Lightyear: Atlas Technologies Holding B.V., which holds the intellectual property (IP) rights, and Lightyear Layer B.V., whose role was not disclosed by the Dutch startup. Unless Lightyear makes a good deal with creditors, they may take a myriad of legal procedures to ensure they get paid – even including these other companies in a lawsuit.
Lightyear may try to negotiate by presenting the reservation numbers for the Lightyear 2 as some sort of warranty that it will eventually have the funds to honor the payments for the Lightyear 0. Without knowing the contract it has with Valmet Automotive and how many people have reserved and already paid for the Lightyear 0, the Lightyear 2 may not be enough to keep creditors happy. After all, reservations are not sales.
Although Lightyear believes the Lightyear 2 will keep it alive, it is a much more complicated product to sell and manufacture. At a much lower price level, the Lightyear 2 only makes financial sense if it is made in high volumes. Without money to pay for the Lightyear 0 production, the Dutch startup also lacks funds to make its own factory. That means it will have to rely on a manufacturing contractor such as Valmet Automotive. We suspect the Finnish company may no longer be interested.
The Dutch startup planned to produce 946 units of the Lightyear 0 at €250,000 a pop. The plans became more than just a promise when Lightyear announced that production started on November 30 at Valmet Automotive in Finland. The apparent explanation for stopping the vehicle production less than two months after it began is the most elementary and telling in the business world: there’s no money for it.
Lightyear said it asked a court “to open suspension of payment proceedings in relation to Atlas Technologies B.V.,” the company the Dutch startup created to take care of the Lightyear 0 production. This legal proceeding is used in the Netherlands by enterprises that do not have enough funds to make payments but still want to avoid bankruptcy. According to Fruytier Lawyers, “a provisional suspension of payment is granted straight away,” and the court appoints an administrator, who will check if the company is still viable.
Two to four months after the provisional payment suspension, the court promotes a hearing in which creditors can vote on a definitive deferment of payment. If the postponement is approved, the debtors have 18 months to fix everything.
Lightyear stresses that the suspension of payment is restricted to Atlas Technologies B.V. There are two other companies involved with Lightyear: Atlas Technologies Holding B.V., which holds the intellectual property (IP) rights, and Lightyear Layer B.V., whose role was not disclosed by the Dutch startup. Unless Lightyear makes a good deal with creditors, they may take a myriad of legal procedures to ensure they get paid – even including these other companies in a lawsuit.
Lightyear may try to negotiate by presenting the reservation numbers for the Lightyear 2 as some sort of warranty that it will eventually have the funds to honor the payments for the Lightyear 0. Without knowing the contract it has with Valmet Automotive and how many people have reserved and already paid for the Lightyear 0, the Lightyear 2 may not be enough to keep creditors happy. After all, reservations are not sales.
Although Lightyear believes the Lightyear 2 will keep it alive, it is a much more complicated product to sell and manufacture. At a much lower price level, the Lightyear 2 only makes financial sense if it is made in high volumes. Without money to pay for the Lightyear 0 production, the Dutch startup also lacks funds to make its own factory. That means it will have to rely on a manufacturing contractor such as Valmet Automotive. We suspect the Finnish company may no longer be interested.
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