[Editor’s Note: This story is part of a “Where Are They Now” series on startups named to NC TECH’s annual Top 10 Startups To Watch list from 2014 to the present. You can find the main story here. There are also six other feature stories on startups from the NC TECH lists that are no longer active standalone companies: Tiger Eye Sensor (2015); Tourpedo (2015); EmployUs (2016); Forecast Health (2016); Cultivate (2017); and myBeeHyve (2018).]
As Tesla’s CEO Elon Musk once said, manufacturing electric vehicles is a bit like eating glass. It’s not rocket science, but it’s incredibly challenging nonetheless between the training, liability and supply chain issues that all converge.
That is something that Rob Cotter, the Founder of Durham-based Organic Transit, knows all too well. In 2014, Organic Transit—which offered a pedal-and-solar-powered vehicle called ELF to combat climate change—was recognized by NC TECH as one of its Top 10 Startups To Watch. Around that same time, the North Carolina Department of Commerce also named ELF as one of the top eight inventions to ever come out of North Carolina, and Organic Transit made a splash on the front page of The Wall Street Journal.
But by June 2019, the company had filed for bankruptcy and ended up being bought at auction by oil and gas company PetroSun in 2020. Here’s the story of how the ELF went sideways.
Organic Transit’s Beginnings
The reason Cotter started Organic Transit in the first place was chiefly to address climate change, he said. This was a burning issue for him since the 1980s when he directed the first solar car race in California. As Cotter puts it, it was depressing to realize how much humans were contributing to climate change just by driving our cars everyday.
At one point, he became the vice president of the International Human Powered Vehicle Association and built bicycles that could hit 50 mph. But fast forward to 2012 and there was still nothing being done to address daily transportation’s impact on the environment, Cotter said.
Bicycles, seen as one of the most sustainable commuting options, did not gain popularity because of safety concerns. You also can’t bring along a friend or carry groceries easily. But with Organic Transit’s ELF vehicle, drivers could help the environment, stay safe while traveling and carry items all at the same time. Cotter said it was the most efficient vehicle ever commercially available and the safest bicycle-type vehicle ever produced as well.
“We wanted the users to be healthier, the cities to be safer, and the planet to be cleaner,” Cotter said.
ELF enabled many people with disabilities to drive to work as well.
Cotter recalls one instance of a University of Washington employee who developed epilepsy and could suddenly no longer drive a car. His half-hour commute turned into a two-hour bus ride each way. With ELF, he could get to work, bring his support dog and, with the University of Washington’s help, even outfitted his ELF to scan the roadside and pull over to the side of the road if he started having a seizure.
“That’s something you can’t do in a car and you can’t do on a bicycle,” Cotter said. “And yet, this guy traveled 70 miles a day safely and was getting healthier because of technology that really didn’t exist 10 years ago.”
Cotter said Organic Transit always had more demand than they could supply. Within nine months, Organic Transit had sold 250 vehicles on Kickstarter in three weeks, selling each for around $4,000. Although Organic Transit had produced 850 vehicles by its end, eventually concerns over the cost of manufacturing the ELF in the U.S. weighed the company down.
Cotter said investors were still uncomfortable investing in that space. One investor was angling to take over the company. Another investor delayed funds for months. Since the startup lacked a deep-pocketed backer or investor group, it made it hard to get the deals they’d like, according to Cotter. Ultimately the company simply couldn’t overcome the production hurdles to manufacture the ELF at scale.
So Organic Transit had to enter bankruptcy, and in 2020 it was acquired by oil and gas company PetroSun. Cotter said he doesn’t believe anything of significance has happened for ELF since then.
“We were in a unique situation,” Cotter said, “but we just never got the capital necessary to realistically scale the operation because as you can imagine, constructing something like this is pretty demanding and capital-intensive.”
From Organic Transit’s fall, Cotter has learned many key lessons as a founder. Being early may not necessarily be an advantage at all, he said. And knowing who your business partners are—and who they might be—is paramount.
That doesn’t mean Cotter has finished his quest to bring more sustainable transportation to the masses.
“I knew we were facing the biggest challenge, basically contesting automobiles and the fossil fuel industries’ dominance, and the chances of failure were high,” Cotter said. “But even in failure, we were hoping to influence others to the possibility of a greener transportation future.”
The next chapter
Nowadays, Cotter is on the board of an autonomous micro vehicle company. But mostly, he spends his time designing and developing the technology for the next-level vehicle he was unable to achieve fully with ELF.
While he says the company is currently in stealth mode to avoid distractions, the tech he’s working on is cross-platform, potentially for use in delivery, commuter, recreation and even aircraft and watercraft vehicles. This version will be more efficient, not necessarily requiring physical action (such as pedaling) to get moving.
Henry Ford failed several times before launching a successful car company, so Cotter believes he is in good company. Cotter’s goals haven’t changed, and ELF’s impact on drivers, around 10 percent of which had disabilities that prevented them from driving, lives on.
“There’s lots of happy endings to all of this, and I’m confident that this is not the end at all,” Cotter said. “The technology we now have developed further is so wildly impressive.”
And as the years have passed since Organic Transit’s inception, the public has increasingly turned to electric vehicles as a cleaner alternative to traditional gas-powered cars. So Cotter remains hopeful more change is on the horizon.
“The interesting thing is the public loved the ELF so much, so much more than the investors,” Cotter said. “And now of course, electric vehicles have become sort of a darling. But they weren’t at the time. I’m not sure what that says about human nature, but I’m excited for the next chapter.”