Recessions tend to have a devastating effect on smaller automakers. The U.S., for instance, had hundreds of brand names when the Depression started, but many were casualties of the shrinking auto market that continued through the 1930s. The ones that survived cut both production and prices, staying afload on paper-thin margins.
Think, the Norwegian company that makes plastic-bodied, two-seat electric cars, has generally lived up to its name. It's tiny, two-seat plastic-bodied EV is both practical and affordable. But despite its prudence, Think was nearly a victim of bear markets and unprecedented tight credit. In early December of last year, the company appeared to have the world by the tail, and was ahead of nearly everybody in Europe getting battery vehicles on the market.
Think had just announced ambitious plans not only to expand in Europe, but to build a factory in the U.S. But then, only weeks later, Think ran out of money, halted production and was placed in the hands of the Norwegian courts.
But Think still had assets and strategic position. The state-of-the-art City EV had benefited from $150 million in Ford investment during that company's four-year ownership (1999 to 2003), and the company had a budding distribution network in Europe and several thousand orders on the books. It still looked good to investors.
Think's Australian-born CEO, Richard Canny, worked closely with U.S. battery partner Charles Gassenheimer of Ener1 to revive the company's fortunes. Gassenheimer predicted to BNET Autos earlier this month that the company would be refinanced by the end of August, and so it has come to pass.
Earlier this week, Think announced that it had emerged from bankruptcy with $47 million in new investment. Ener1 has put in an $18 million, three-stage investment and agreed to convert an additional $3 million in debt for convertible preferred shares of Think. That part of the deal transfers Ener1 Group's 10 percent stake to Ener1 Inc. When the investments are complete, Ener1, Inc. will own 31 percent of the company.
Ener1 will continue to supply batteries to Think via a long-term arrangement. "Automakers need made-to-order performance combined with the pricing and availability of an off-the-shelf system," said Gassenheimer in a statement. "Ener1 and Think have collaborated for years on systems development, and today possess a unique ability to bring together category-leading technologies in a fully integrated platform, to suit a wide variety of vehicle applications."
A Norwegian venture fund, Investinor, with ties to that country's Ministry of Trade and Industry, is also a new partner, with $5 million invested.
And because of a new deal with Valmet Automotive, Think will be moving its car production to Finland, where the City urban cruiser will be built alongside the Porsche Cayman and Boxster. Valmet, which will also build the Fisker Karma under contract, gets a small stake in Think. "We have a deep and strategic partnership with Valmet," Canny said.
And the U.S. plans are on again. Canny told BNET Autos that the company hopes to have a factory turning out Citys in one of three selected states by late 2010. A Dearborn-based team is working not only on choosing a location but securing a vitally important Department of Energy loan. U.S. production will begin with low-volume fleet sales, and ramp up for a full retail launch in 2012, Canny said.
For now, the company is focused on the City, and Canny says that he remains very excited about the prospects for small urban vehicles. The City will be given added power for the U.S. launch, with 75- to 80-mph highway cruising possible, Canny said. The European City tops off at around 65 mph.