EV Maker Think Files for Bankruptcy
The maker of one of the electric vehicles anticipated for launch in North America later this year filed for bankruptcy protection yesterday in its home market of Norway.
This is the fourth time in its 20-year history Think Global AS has run out of sufficient operating capital.
“We needed some additional funding and although we had interested investors they were not able to come to the table quickly enough,” Think spokesman James Andrew told Automotive News Europe.
The bad financial news follows the announcement early May by Ener1, the supplier of Think’s prismatic battery cells, that it was severing relations with Think.
Yesterday Edmunds reported Manhattan-based Ener1 declared in a government filing that Think owes it $35.4 million, and suggested Think would be liquidating its assets.
Ener1 also told the U.S. Securities and Exchange Commission that it was not holding out hope for recovering the full debt, and “this amount is subject to change to the extent that we receive any recovery as a result of the liquidation of Think Global,” Ener1 said, “we presently believe that any such recovery, to the extent it occurs at all, is not likely to be significant.”
Think’s spokesman declined to tell Automotive News Europe how much cash the company needed to stay afloat.
Think’s single electric vehicle, the City minicar, sold just 1,043 units in 2010 in Europe, and production has been stopped since March this year.
At the time the reason given for stopping assembly at its factory run by a contract manufacturer and Think investor Valmet Automotive in Uusikaupunki, Finland, was to re-balance its inventory.
Former U.S. plans
Think’s minimalist, plastic-skinned EV was due in North America sometime later this year.
I had opportunity to drive one around a few blocks in Washington, D.C. a couple months ago, and it was a neat little city car, with decent acceleration, and interior space utilization, if not pricey.
The company had edged up its expected MSRP to $36,495, which was $4,000 over the larger, better appointed Nissan LEAF. Like the LEAF, it would have been eligible for subsidies, which would have reduced consumers’ total net outlay.
The first contract agreement in October 2007 between Ener1 and Think called for its EnerDel battery subsidiary to deliver production prototypes in March 2008 and pre-production parts in July 2008.
The goal then was that Think would sell enough cars for two years ending 2010, allowing Ener1 to sell $70 million worth of its batteries.
Ener1 reportedly invested $90 million based on this promise and hope for sales of as much as $200 million in the longer term.
The trail of unfulfilled plans ended yesterday as a court-appointed trustee from Oslo-based commercial law firm Thommessen took control of Think.
The trustee will manage Think’s assets including those of Think North America, a wholly owned subsidiary with an EV production plant in Elkhart, Ind.
Because the North American division is supported by the Norwegian company, its future is in doubt.
Think almost went down in 2008 with the global financial crisis, but restarted production late 2009 with help from new investors. The company has had a hard time keeping its head above water ever since it was sold by Ford Motor Co., which had owned it from mid-1999-January 2003.
Reports are this is a case of four strikes and they’re out. We shall see whether the company can be rescued again, or not.