Electric carmaker Th!nk was denied its request to the Norwegian government for loan guarantees to weather the current economic crisis. The denial may have sealed the company’s fate.
Th!nk requested an estimated $15 to $30 million bailout. According to the company, those short-term guarantees, plus a temporary work stoppage and a layoff of 50 to 70 percent of the company’s 250 employees, was necessary to keep the business afloat. The government funding could have enabled Th!nk to stay on track for launching the Th!nk City, a zero-emission micro car, in European and US markets in the next year or two. The Th!nk City is capable of reaching 65 miles per hour and traveling up to 110 miles on a single charge.
“There are many companies that are in a demanding financial situation,” Deputy Minister of Trade and Industry Rikke Lind told Reuters. “The government cannot go in on the ownership side or provide loans to specific companies in today’s situation.”
Th!nk requested the aid citing “urgent financial distress” due to a shortage of working capital. In the midst of the current global economic crisis, automotive start-ups are finding it increasingly difficult to secure private investment dollars.
“We are in a very serious situation.”
In a case of electric car Darwinism, niche players like Th!nk, Tesla and Miles Electric Vehicles could fall by the wayside—while major auto manufacturers pursuing full battery-electric vehicles, most notably Nissan, could assume a dominant role in the burgeoning electric car market.
Th!nk halted production on Monday with hopes to resume normal operations soon after the government loan was approved on Tuesday. Now there’s no telling when or if the plant will begin building cars again. “We are in a very serious situation,” said Richard Canny, chief executive officer, in a news conference this morning. He said the company will probably not survive without government intervention.
Just last week, Th!nk reported that it has been building eight to ten Th!nk City cars per day since October, with a full-scale production target of 44 vehicles per day by mid-2009. Those plans for growth—an oddly optimistic outlook coming one week before the company predicts its own demise—indicate a mismatch between high hopes and grim realities for today’s electric car companies.