Shortly after winning the 2010 Automotive X-Prize in the Alternative Side-by-Side Class, the Li-Ion Motors team made it known that the $2.5 million prize purse would be split three ways with the category runners ups. The money-splitting move showed that camaraderie existed behind the scenes of the competition, but something else was going on, out of the public's eye, that makes us question whether Li-Ion Motors is deserving of any accolades at all.

According to the New York Times, on the same day that Li-Ion Motors hoisted that oversized $2.5 million dollar check, a lawyer representing Li-Ion Motors was hashing out a $75,000 settlement (PDF) with Barret Lyon. As the story goes, Lyon purchased a converted, battery-powered PT Cruiser from Li-Ion Motors (formerly known as Whistler Investments Inc., Hybrid Technologies Inc. and EV Innovations). The converted car, Lyon claims, was "dead on arrival" and is now "rotting" away in his driveway. After repeated attempts to rectify the situation, Lyon, realizing that Li-Ion Motors had no intentions of correcting the problem, filed a lawsuit against the company. Then, on the day that the X-Prize winners were announced, Lyon dropped the suit and negotiated the $75,000 settlement.

Here's where the story takes a turn for the worse because Li-Ion Motors is unable to pay Lyon. Why's that, you ask? Apparently, the company is still waiting to receive its prize purse and, without that money in hand, it doesn't have sufficient funds to pay off the settlement. If you think it's against the spirit of the competition to use X-Prize winnings to pay off a customer who claims that the company couldn't deliver him a driveable electric vehicle, we'd agree. For its part, Li-Ion Motors claims that Lyon will not be paid with X-Prize money, but instead with "company money." But an e-mail from Li-Ion Motors obtained by Greenwire indicates that Lyon will not receive payment until the X-Prize winnings materialize.

Li-Ion's shaky past brings up a question about whether or not the company really qualifies to win the X-Prize. If you recall, one of the key criteria for the X-Prize was that all entrants must submit a credible plan for mass production. But Li-Ion Motors is a company that has allegedly taken part in a stock-manipulation scheme, was flagged for "abusive practices" and initiating "pump and dump" schemes in the penny-stock market, has been investigated by the SEC on two occasions and owes more than $250,000 to the IRS in unpaid taxes. X-Prize spokeswoman Carrie Fox told the New York Times that Li-Ion Motors, "showed a very clear understanding of the industry" and added that, "they had a very solid financial position, and thorough manufacturing and production capabilities." Could Li-Ion Motors have manipulated X-Prize officials as well?

[Source: New York Times]

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