Navigant Research Blog

Chinese Medicine Revives Undead EV Makers

Scott Shepard — June 15, 2012

Despite a global market that has been slower to launch than anticipated, electric vehicles (EVs) still draw a lot of attention and serious capital.  This fact has been exemplified by the persistent investment, and reinvestment, in automakers that have gone belly-up.  The most recent announcement came on June 13th, when a newly formed Chinese-Japanese investment group bought the Swedish automaker Saab.  The investment group plans to convert the company into an all-electric car maker with a planned 2014 deployment to the Chinese market.  The amount of the buyout was not disclosed; a competitive bid for the company by Zhejiang Youngman Lotus Automobile on June 8th was $567 million.

Turning Saab into an EV company is a big gamble, and a 2-year timeline for introducing a model is an ambitious target for an industry that has been consistently late on planned deployments and consistently short on sales goals.  But the Saab makeover is not unusual for an emerging industry full of EV programs that seem to start up, collapse, and re-emerge monthly.

A similar development occurred last month, with the reemergence of Aptera, a Santa Rosa, California-based maker of three-wheel EVs that went under last December.  The company’s assets were bought by a consortium of Chinese and American investors with a major Chinese backer, the Jonway Group, which previously acquired EV-maker ZAP.  The vehicle bodies will be made in China, final assembly will take place stateside, and they’ll be sold under the name Aptera USA.

Another venture that pushes the boundaries of resilience, if not sanity, is TH!NK City.  From 2008 to 2011, the Norwegian maker produced the City, an urban mini EV that was sold in limited numbers to markets in the United States and Europe.  By March 2011 over 1,045 units had sold worldwide, but due to a lack of funds the company filed for bankruptcy in June of 2011 for the fourth time in 20 years.  Yes, the fourth time.

Despite TH!NK’s poor financial record, the company took no time to find a buyer, Electric Mobility Solutions AS.  The car has now started to exhibit some success through a manufacturing facility in Indiana and pilots in Oregon, California, New Jersey, and Indiana.  As of this month, the company has produced 300 EVs in 2012; they are priced from $22,000-$25,000 after state and federal incentives/rebates.

These reawakenings underline the many challenges that exist in the EV industry and the general weakness of the EV market today, but they also demonstrate that investors, particularly Asian investors, believe the nascent market has enough room for startups to challenge established players Nissan, GM, and Mitsubishi.  For EV makers and their suppliers who have never made a profit (Tesla) or are continually toeing the fiscal cliff (A123), there is hope.  And it often seems to come from China.

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