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A $500 eBike? Not So Fast.

Dan Tynan
Yahoo Tech

It appears that building an electric bike that goes up to 50 miles on a charge and costs less than $500 is a really popular idea.

Our story on the Storm eBike Indiegogo campaign was viewed millions of times. More than 3,000 people forked over $500 apiece to get on the list to receive one when production starts later this year. The campaign blew past its $75,000 funding goal in a matter of hours; it currently stands at more than $2.4 million, with 26 days left to go.

(Indiegogo.com)

It was a crowdfunding campaign successful beyond anyone’s wildest dreams. But dreams are not reality. And some things really are too good to be true.

Storm clouds

Earlier this week Storm eBike was hit with a cease-and-desist letter from Prodeco Technologies, a Florida-based maker of electric bikes. The company is claiming trade-name infringement and a lot more.

Prodeco has been selling a $1,300 electric bike named Storm since 2010, says CEO Robert Provost.

“About three days ago we started getting phone calls and emails from people asking, ‘Where’s your $500 e-bike?” says Provost.

Prodeco’s cease-and-desist letter, addressed to Storm eBike co-founder Storm Sondors, also accused the company of making “grossly inaccurate” and “false” claims in the Indiegogo campaign.

“What they are claiming is highly suspect,” Provost says. “We’re afraid a lot of people who think they got a great deal will be disappointed with the bike and it will reflect poorly on us.”

We spoke with other e-bike manufacturers, retailers, investors, and reviewers about the information provided on Storm’s Indiegogo campaign. Without exception, our sources say the claims being made about the Storm eBike are exaggerated at best.

Pedal to the metal

The Storm eBike promises impressive specs: the ability to run on sand or snow as well as pavement, a maximum speed of 20 mph, a range of 30 to 50 miles, and a recharge time of just 90 minutes.

Storm eBike (Source: Indiegogo)

Those numbers just don’t add up, says David Santos, vice president of sales and business development for Big Cat Worldwide, a New York-based seller of e-bikes. 

“Our first-generation bike used the same type of 36-volt, 10-amp-hour battery,” he says. “It got between 20 and 30 miles of range, and that’s riding with pedal assist. Using just the throttle you might get 20, less if you’re running on sand or up hills. The charge time is also problematic; with that kind of battery you’re looking at four to six hours, not 90 minutes.”

Others questioned the weight. The Indiegogo campaign claims the steel-framed e-bike weighs just 45 pounds complete, but that’s highly unlikely, says Court Rye, owner of the Electric Bike Review website. He’s posted an 18-minute YouTube video of his thoughts about the Storm eBike that he says tries to strike a balance of appreciation for the low price point and realistic expectations.

“I do question some of the Storm’s specs,” Rye says. “The lightest fat-tire electric bike I’ve ever reviewed and weighed myself is the Felt Lebowski, a $5,800 performance model built with 6061 aluminum alloy — it weighs just 48 pounds. Steel is much heavier, in my experience.”

But the biggest concerns we encountered are whether any company can build a sustainable business selling e-bikes at such a low price, and the corners it may be cutting to get there.

You can build an e-bike in China and sell it for $500, but it won’t be very high quality, says Ann McSpadden, proprietor of Alien Scooters, a retailer of electric vehicles outside Austin, Texas.

“I can go on Alibaba, buy parts, set up shipments, and get people to buy these things,” she says. “The question comes on the support side. Will they have spare parts? Will they have tech support? Do they carry insurance? Real manufacturers of e-bikes have serious insurance in case something goes haywire or someone has an accident. That’s $20,000 to $30,000 a year.”

Warren Pollock, an entrepreneur who has worked with Chinese e-bike companies and motor manufacturers, questions Storm’s business model.

“At $500 apiece,” he says, “the company would be selling e-bikes at a loss, once they factored in product liability insurance, quality control, regulatory compliance, safety testing, and post-sales service and support. Chinese e-bikes could certainly ‘leak’ into the U.S. market near that cost, be sold as a loss leader, or be marketed directly on eBay, but a fully costed business model could potentially lose up to $250 per bike.”

Who are these guys?

After Prodeco discovered the Indiegogo campaign and decided to take action, it ran into a problem: It couldn’t find anyone to send its cease-and-desist letter to.

The company’s original website, Storm-ebikes.com, redirects to the Indiegogo campaign. Neither site lists a physical address or contact information besides an info@ email address. The domain name information for its websites is masked. As far as we are able to determine, Storm eBikes is not registered as a corporation in California.

(Storm-ebikes.com)

Information about the company’s two co-founders is scant. Storm Sondors has left virtually no trail behind him on the Internet, save for a seldom-used YouTube account. Jon Hopp is a film editor working for a Los Angeles marketing firm. His Facebook account displays photos of two fat-tire bikes virtually identical to the Storm eBike, sporting logos from different manufacturers.

(Jon Hopp/Facebook)

No one contacted for this story had heard of either man before the Storm eBike campaign. 

Prodeco finally sent the letter to Storm’s Facebook page and to Indiegogo’s legal department. According to an Indiegogo spokesperson, the crowdfunder then forwarded the letter to Storm.

Unlike Kickstarter, which doesn’t collect your money until after a funding goal has been met, and gives funders an opportunity to cancel their pledges if they change their mind, Indiegogo charges credit cards or Paypal accounts immediately once people make a contribution. There’s no changing your mind and getting money back. 

As with other crowdfunding platforms, Indiegogo is under no obligation to refund contributions if the owner of the campaign fails to deliver the goods as promised. If you’ve put money into an Indiegogo campaign and want a refund, you’ll have to negotiate that with the campaign owner.

Indiegogo allows campaigns (like Storm’s) to use a “flexible funding” option to keep any money they raise and withdraw it at any time. Indiegogo keeps 4 percent of the money once the goal is met, plus fees on every transaction. Indiegogo was unable to tell us if any of the $2 million gathered by the campaign had been dispensed.

YahooTech has given Storm eBike an opportunity to respond to all of these allegations; at publication time it had yet to do so. We’ll update this story if it does. 

Reach Dan Tynan at ModFamily1@yahoo.com.

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