IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Tuesday, March 27, 2012

A Japanese-Chinese electrified Saab dream

Last week we got the news that a Japanese-Chinese consortium is interested in acquiring the Saab bankruptcy estate to start producing electric vehicles in Trollhättan. It was reported that the electric vehicles would be produced under the Saab brand. In addition, also batteries are said to be planned for production in Trollhättan.

"They have tabled a bid and are very aggresive - it is a Japanese-Chinese consortium," a source told just-auto.

"They have serious money and are a serious competitor," the source said and continued "It's a huge consortium together with battery manufacturing - they are planning to make electric cars."

But the future for electric cars is very much disputed. Some say electric cars is a false trail, while others embrace the technology. The hard fact is that currently electric cars are just too expensive to buy and do not offer the flexibility of the fossil fuel cars. Batteries are heavy and expensive and have a limited life span, and the cars do not offer the loading space and the travel distance that fossil fuel cars do.

The acclaimed Chevy Volt/Opel Ampera (recently voted European Car of the Year) hybrid has sold so poorly (about 10,000 cars in 2011) that production was recently halted. Also last year's European Car of the Year, the electric Nissan Leaf, has sold poorly. Just a little over 20,000 Leafs left the Nissan dealer lots in 2011, and production for 2012 is only planned to 40,000 cars.

In Sweden, where the Japanese-Chinese consortium now wants to manufacture electric cars in a plant scaled at producing 150,000 cars per year, the car buyers have still to embrace electric cars. Swedish Radio reports that only 25 out of 40,000 new cars sold in January and February were electric.

In the UK, according to The Financial Times, there were only 1,000 electric cars sold last year, and in France only 2,000. In the US, in a year when auto sales were up more than 10%, sales of "alternative power source light vehicles" rose just 2.3%, according to WardsAuto. Only 18,000 electric cars (incl. plug-ins hybrids) were sold in the US in 2011 according to CleantechBlog. Gartner, the large technology market research firm, has forecasting 100,000 electric car sales in 2012 in the US. But 2012 has started slow. The Nissan Leaf only sold 1,154 in January-February and the Chevy Volt hybrid only 1,626 according to Autoblog.

The introduction of more and more electric vehicles will drive the numbers upwards, but the main problem, i.e. high prices, will remain for a long time.

A Ford Focus electric sells for $32,500 (including a $7,500 US government tax credit) and a home battery-charging unit costs a further $1,499. By comparison a petrol Ford Focus sells for $16,500.

The Guardian reports that even industry executives are not optimistic. A survey of global car executives by KPMG recently found that they do not expect electric-car sales to exceed 15% of annual global car sales before 2025. This figure is still far higher than most independent analysts offer.

So if the Japanese-Chinese consortium is successful in acquiring Saab, then maybe Saab will be an even more rare car than it is today. Maybe the Saab owners of the future will be even fewer, even more special and even more quirky than we are today.