ANN ARBOR, MI – Financial difficulties currently have Think Global AS in limp mode, but that isn’t stopping the Norwegian electric-vehicle maker from launching the groundwork for an expansion into the U.S.
Newly available government subsidies and what Think sees as an emerging market for EVs has the tiny auto maker formulating plans for a new technical center and vehicle assembly plant in the U.S.
Think officials, on hand here in this university town to detail their game plan, say they currently are in discussions with eight states, including Michigan, for the plant and engineering operations.
The factory would have an initial capacity of 16,000 cars annually and employ about 300 workers, with the envisioned 60,000-sq.-ft. (5,574-sq.-m) tech center and test facility supporting about 70 engineers and electric-drive specialists, the company says.
Ultimately, U.S. employment would total 150 people at the technical center and 900 at the manufacturing plant, with vehicle capacity growing to 60,000 units annually.
Production would start in 2010, with first-year volume pegged at 2,500 vehicles.
Helping draw Think back to North America – it sold tiny city and neighborhood EVs in the U.S. earlier in the decade underMotor Co. ownership – is the $25 billion in advanced technology funding available through the Department of Energy.
CEO Richard Canny says Think will file applications for the DOE grants March 31, but he declines to say how much money the company will seek.
“Funding is a big part of it,” Canny says of Think’s decision to pursue U.S. operations. “But it also is how quickly the (EV) fleet and retail business could be evolving.”
Think projects a market of 4.5 million EVs and hybrids worldwide by 2016, including about 2 million in North America, and Canny points to now available federal tax incentives of up to $7,500 on the purchase of an EV as one of the signs a consumer market could be emerging in the U.S.
“There’s no doubt that there’s been a paradigm shift and electrification is here,” says Canny, who spent 25 years within Australia, South America and the U.S. prior to heading up Think. “The U.S. has the potential to overtake Europe as a design and assembly site (for EVs).”
Think officials are meeting with representatives from candidate states this week and expect to narrow its list of possible plant sites to two states by the time it files its DOE grant application.
Canny says Think is looking to launch fleet and pilot programs in the U.S. in 2010 and branch out into the retail market in 2011.
The retail strategy hasn’t been completely thought out yet, Canny admits, so exactly how the Th!nk City would be distributed is unclear. He says the Smart-sized 2-seater would have to sell for about $20,000, after all tax-rebate and other incentives are deducted. That wouldn’t include a potential monthly lease fee of about $80-$90 for the batteries.
Canny says Think currently leases the batteries in Europe to some City buyers.
“Fleet customers typically want to purchase the batteries and retail customers like to lease,” he says.
Production at Think’s Aurskog, Norway, operations is on hold as a result of the company’s failure to line up new financing in December. In January, it landed $6 million in interim funding, which is allowing it to sustain operations while it restructures under Norway’s equivalent of a Chapter 11 bankruptcy, but a production re-launch awaits additional more permanent financing.
The company will need to have that lined up to qualify for any DOE money to back its planned U.S. R&D and manufacturing facilities.
Only about 400 of its new-generation City cars were produced before operations were suspended, including about 10 in December, but Think has roughly 1,500 backorders waiting to be filled, Canny says. If all goes well, the plant could start up in April or May, he adds.
Breakeven for the operation is pegged at 5,000 vehicles annually, with total production over Think’s 17-year history less than 2,000 units.
The Th!nk City measures just 122.8 ins. (311.9 cm) in overall length, 63.1 ins. (160.3 cm) wide and 60.9 ins. (154.7 cm) in height and weighs 2,288 lbs. (1,038 kg). Its plastic body panels feature molded-in color and overlay a high-strength steel frame that helps the car meet European and U.S. safety standards.
The City has a range of 112 miles (180 km), without the heater running (there is no air conditioning), and a top speed of 62 mph (100 km/h). Recharge time is 10 hours using a 220-volt line.
The batteries are housed under the floor between the two axles within the high-strength-steel frame, providing an elevated seating position for the driver and striking a weight balance that “makes it very difficult to roll the car over,” officials say.
One of the City’s most unique features is it “Mindbox” 2-way communications system that allows the owner to remotely monitor the battery’s charge status, operate its heater or track its location (an attractive feature for fleet operators) using a cell phone.
Currently, the car is available in Europe with three different battery systems from three separate suppliers, including Switzerland-based MES DEA SA and A123Systems Inc. and EnerDel in the U.S. A123Systems and EnerDel supply lithium-ion batteries with outputs of 18 kWh and 24 kWh, respectively. MES DEA’s sodium-based Zebra battery is the most powerful at 28 kW.
The City uses a 35-kW (47-hp) electric motor, but a U.S. version likely would be upgraded to 50 kW (67 hp), and a performance version of the car with an 80-kW (107-hp) motor also is planned. For the U.S. version, Think is targeting an increase in the range to 120 miles (193 km) and a boost in the top speed to 75 mph (121 km/h).
The U.S.-market upgrades, plus changes to keep the car on pace with federal safety standards – smart airbags and electronic stability systems will be required, for example – are among tasks planned for the new technical center.
That facility also would be charged with restyling the car in time for its 2011 retail market launch in the U.S., as well as developing other potential derivatives, such as a small cargo van, flatbed pickup and convertible.
The company also is eying a larger model, showing a 4-door cross/utility vehicle at the Geneva auto show last year.
“That’s still a ways away,” Canny says. “But if battery development moves as fast as we hope, it might be possible in three to four years.”
Think says its U.S. manufacturing investment would come in two phases, beginning with an assembly operation and ultimately adding welding and frame painting functions.
Canny says he realizes bigger auto makers are ready to jump into the EV game, making it critical for the tiny Think to stake out its ground early.
“The big guys will have a $300-$500 cost advantage, and we have to find a way to compete with that right now,” he says, adding Think’s 17 years of experience and connections it has made in the EV supply chain should help it do that.