State aid program unsuitable for the manufacturer of electric vehicles
Aachen, April 2, 2020 - Today, e.GO Mobile AG has filed an application for self-administered insolvency at the Local Court of Aachen/Germany. The court has already approved the application and appointed Biner Bähr of White & Case as interim administrator. With immediate effect, Paul Fink from FRH, a law firm specializing in restructuring and insolvency law, supports and joins the board of directors as an authorized representative.
"This is a new challenge from outside in the only five-year history of e.GO", regrets Prof. Günther Schuh, CEO of e.GO Mobile AG. The company has already overcome numerous setbacks in the past and could only recently report on a stable series ramp-up and enthusiastic first buyers. The sale of Opel to PSA in 2017 led to the situation that it was no longer allowed to use Opel parts for e.GO Life electric vehicles. In 2018, some suppliers issued new governance codices in response to the “Dieselgate” and unilaterally terminated existing supply contracts. e.GO had to invest a lot of time and money to make the necessary corrections. At the end of 2019, the German government finally announced to extend and increase the environmental bonus for electric cars without releasing manufacturers solely producing electric vehicles from the manufacturer's share of the bonus. This significantly weakened the competitive advantages of e.GO on the German market and also made the further financing rounds of e.GO considerably more difficult. Now, the effects of the Corona crisis not only led to the interruption of sales and supply chains in the automotive industry but also to the collapse of the capital market.
"Up to this point, our predominantly strategic investors have given us strong support and made it possible for us to be the only start-up in Europe to bring an electric passenger car into series production and on the roads. Now, of course, they have other priorities" says Prof. Günther Schuh. No state rescue program is suitable for e.GO either. The house banks are not able to take over a part of the financing of e.GO. For such cases, the “Act for Further Facilitating the Restructuring of Companies” (ESUG) was passed in Germany.
Despite the ESUG proceedings that have now been applied for, e.GO continues to have ambitious plans and wants to grow significantly in 2021 and 2022. Already in 2021, e.GO expects a positive operating cash flow and from the second half of 2020 also anticipates the first revenues from a CO2 certificate pool. In 2018, e.GO opened an Industry 4.0 reference factory for the four-seater e-vehicle “e.GO Life” in Aachen (Rothe Erde). The series production started in spring 2019 and the vehicles have been delivered to the customers since autumn 2019. "Therefore, we want to keep all our employees on board and we hope that our customers and suppliers will remain loyal to us during this period of self-administration," says Prof. Günther Schuh. "We have already achieved 80% of what is currently impossible in Germany. And we are creative and tough: We are German engineers! We will also survive this crisis. We are an attractive company that has already developed essential solutions for sustainable mobility of tomorrow”.
e.GO Mobile AG
e.GO Mobile AG was founded in 2015 by Prof Dr Günther Schuh as a manufacturer of electric vehicles. On the RWTH Aachen Campus, nearly 500 employees take advantage of the unique network of research facilities and more than 400 technology companies. The agile teams work on a variety of cost-effective and highly durable electric vehicles for short-haul traffic.
e.GO Mobile AG
T +49 241 47574-227