Electric car maker Th!nk in trouble requests govt. money

[speculawyer]

A sad statement on EV market.

UPDATE 1-Norway electric carmaker seeks aid, halts production
Mon Dec 15, 2008 12:48pm EST

* Car maker in "urgent financial distress" seeks state aid

* Says working capital difficult to get, needs up to $29 mln

* Says suppliers severely hit by crisis

* Temporarily halts production in Norway, eyes Q1 restart

(Adds more, details, comments from news conference)

By Aasa Christine Stoltz

OSLO, Dec 15 (Reuters) - The Norwegian maker of the two-seater Th!nk City electric car said on Monday it was halting production and seeking state aid to escape its "urgent financial distress", which was sparked by the global financial crisis.

Like many other car companies, privately-held Think said it had difficulties in obtaining working capital and that automotive suppliers offered tougher terms on parts.

"We are in a very serious situation," Chief Executive Richard Canny told a news conference. He Canny said the company would probably not survive without the government's help.

Asked about the risk of bankruptcy, he said: "We would not have take these actions if it was not serious. We need to intensify efforts to bring in new capital."

He said Think needed 100 million to 200 million crowns ($14.5 million to $29 million) in the short term through guarantees, but declined to be specific on total capital needs for its planned expansion.

Think said it would temporarily stop production at its Norway plant and lay off 50 percent to 70 percent of its employees while sorting out its financial problems.

He said it was hoping to restart production in the first quarter of 2009.

Think said there are "limited possibilities for funding working capital through bank credits without extra guarantees in today's financial markets."

The company has gone bankrupt twice, last in 2006, but found new life with the backing of new owners and investors.

"I honestly think given what is going on in the capital markets it is going to be very difficult," Canny replied when asked whether it would make it without the government's help. He said the company was in a "good dialogue" with the government.

"Every day we are getting increasingly positive signals."

Earlier in December, the Swedish government said it would provide up to 25 billion Swedish crowns ($3.15 billion) in credit guarantees and emergency loans to its ailing auto industry, but has no plans to buy stakes in Volvo or Saab.

RAMP-UP

With one car model in production, the micro Th!nk City, the group plans to ramp up production next year, launch the car in several European cities and set a date for its U.S entry.

Th!nk City has been in production since late October, and the company produced between eight and 10 cars a day. It aims to reach 44 units a day when running at full capacity sometime in 2009.

The company also aims to launch a four-seater version of Th!nk City, which is an emission-free, 95 percent recyclable car with a maximum speed of 65 miles an hour.

A five-seater is expected to be in production by 2011.

"We are ... about to become the world's largest electric vehicle manufacturer which will grow over the next 6-12 months period as we expand from hundreds of units to thousands of units," Canny told foreign reporters during a visit to its offices and production plant on Friday.

Think plans to launch its offer in Copenhagen and Stockholm first, then moving to Paris and London. Th!nk City -- about the size of a Toyota Yaris or Honda Fit -- runs on sodium or lithium batteries and can travel up to 110 miles (177 km) on one charge.

In Norway, which has high taxes on cars, the two-seater costs 212,500 crowns ($30,950), compared with about 170,000 to 190,000 crowns for comparable petrol cars, Canny said. (Editing by Andrew Macdonald)

http://www.reuters.com/article/rbssC...han nel=10276

[KarenRei]

You see this?

http://www.autobloggreen.com/2008/12...orders-guaran/

We learned earlier today that Norwegian electric automaker Th!nk had requested a handout from the Norwegian government. We've now heard that the government is not likely to give the EV maker any money. According to a translation of a piece in the Norwegian news source Dagbladet by AutoblogGreen reader Leif E., the government will not step in, saying that helping one company but not others was not sound policy. Th!nk's claim that it needs $15-30 million in government-backed funds within weeks to avoid bankruptcy was apparently not enough of a reason for the government to step in and it looks like at least half of Th!nk's 250 employees will be laid off in January. Think CEO Richard Canny said his company was "in a dire situation."

Honestly, I've never been a big fan of the Th!nk City. Their lack of extreme streamlining and weight reduction means that they have to use a bigger battery pack, which means that they have to hide part of the cost of production through gimmicks like battery rental. Performance also suffered. However, I know some people here are fans of it, and either way, it's a shame to see an EV maker risk going belly up. Their situation sounds much worse than Tesla's. Also, I worry about downstream effects; the world EV market isn't very big right now, and I'm sure many companies were banking on the tens of thousands of annual sales Th!nk was promising.

[speculawyer]

Other than the $109K Tesla, the Th!nk was the only EV that has passed crash tests such that it could be sold as a highway capable automobile EV in the USA. (It was not yet being sold here though.)

Between the high cost of batteries and the difficulty and expense of passing crash tests, the EV automobile market is looking pretty dead until oil prices surge up again.

[evmavin]

The Think is expensive as production in Europe is expensive and they are using high quality EV components, it was one of the most successful EV's built. If it were made in a more affordable production location it would most likely be doing better. In addition it is a full featured and very practical city car due to it's compact size and safety. I really hope someone buys them as they are the only production EV today and the only one to survive for some time.

[speculawyer]

Originally Posted by evmavin

The Think is expensive as production in Europe is expensive and they are using high quality EV components, it was one of the most successful EV's built. If it were made in a more affordable production location it would most likely be doing better. In addition it is a full featured and very practical city car due to it's compact size and safety. I really hope someone buys them as they are the only production EV today and the only one to survive for some time.

Maybe this is Ford's opportunity to redeem itself by buying Th!nk back again.

I don't think wages can really be the issue . . . they have so few workers as is. But I agree that they really need to start producing elsewhere. They need to open up a factory in the central valley of California. Cheap labor, cheap land, lucrative tax breaks due to Ah-nulds pro-EV tax break bill for Tesla, and close to the ideal markets of LA, SF, Portland, Seattle, etc. They can even put Solar panels up on their roof to generate lots of clean power . . . they can use REC solar panels! (inside joke)