photo: Think
Think Global, the innovative Norwegian electric car company, has temporarily halted production of its City urban runabout and laid off half its workforce as it considers a sale to survive the credit crisis, Think CEO Richard Canny told Green Wombat Tuesday.
“Think is in a situation where we can’t grow anymore,” Canny said from Think’s Oslo headquarters, where the management team was still working at midnight. “We have started an emergency shutdown to protect our capital and our brand. We’ll need a new and stronger partner, whether that is a 25% owner or a majority owner or someone who buys the company.”
The Norwegian government said on Tuesday that it would not make an equity investment in the automaker but is considering Think’s request to guarantee up to $29 million in short-term loans. “Even a small participation from the Norwegian government will give investors confidence,” Canny said, noting that the company needs to raise $40 million to continue manufacturing its electric car. “The financial crisis has hit at a very critical stage as we’re ramping up production and when external financing is hard to bring into the company and internal funding is limited.”
He said a rescue package might include aid from from the Norwegian government and an infusion of cash from new investors or strategic partners. “We’re putting a hand out. People who would like to work with us should pick up the phone.”
Ford (F) acquired the startup in 1999 and sold it a few years later. Norwegian solar entrepreneur Jan-Olaf Willums and other investors rescued Think from bankruptcy in 2006, aiming to upend a century-old automotive paradigm by changing the way cars are made, sold and driven to create a sustainable auto industry.
As Green Wombat wrote in a 2007 feature story on Think, “Taking a cue from Dell, the company will sell cars online, built to order. It will forgo showrooms and seed the market through car-sharing services like Zipcar. Every car will be Internet-and Wi-Fi-enabled, becoming, according to Willums, a rolling computer that can communicate wirelessly with its driver, other Think owners, and the power grid. In other words, it’s Web 2.0 on wheels. ‘We want to sell mobility,’ Willums says. ‘We don’t want to sell a thing called the Think.’
The company sells the car but leases the battery so buyers don’t have to fork over cash upfront for an electric vehicle’s single most expensive component – an idea subsequently adopted embraced by everyone from Shai Agassi’s Better Place electric car infrastructure company to General Motors (GM).
The failure of the new Think would be a blow at a time when the auto industry desperately needs to reinvent itself. While Think is a niche player and faces formidible competition as Toyota (TM) and other big automakers go electric, it has pioneered the idea of a new automotive infrastructure that includes tech companies and utilities like PG&E (PCG).
Whether Think can survive the global financial crisis remains to be seen, but Willums, who stepped aside as CEO recently but remains on the board, is a prodigious networker with deep contacts in Silicon Valley and elsewhere. In little more than a year he raised around $100 million from an A-list of U.S. and European investors that includes General Electric (GE), Keiner Perkins Caulfield & Byers and Rockport Capital Partners – the latter two marquee venture capital firms formed a joint venture with Think to sell the City in North America. Canny said the U.S. expansion plans are now on hold.
The question now is whether Think’s investors, absent a government bailout, will step up to save the company just as it has started to gain a foothold in the market. In a presentation made Monday, Canny, a Ford veteran, said eight to 10 two-seater City cars a day had been rolling off the company’s assembly line outside Oslo. Think has a blacklog of 550 orders and 150 cars will be delivered by January. The company was set to begin selling a 2+2 version of the City in mid-2009. (Think had planned to begin selling its next model, a five-seat crossover car called the Think Ox, in 2011.)
“There are limited possibilities of funding working capital through bank credits without extra guarantees in today’s financial market,” Canny said, noting that the company hopes to resume production in the first quarter of 2009. “Think’s automotive suppliers are severely hit by the overall industry crisis, leading to tougher terms of parts delivery to Think.”
Green Wombat will throw out one potential savior of Think: Google (GOOG). Many aspects of Think’s innovative business model were born at a brainstorming session that the search giant hosted in 2006 for Willums at the Googleplex in Mountain View, Calif. Given that Google.org, the company’s philanthropic arm, has poured tens of millions of dollars in green energy companies and electric car research, an investment in Think would be another way to drive progress toward its goal of a carbon-free economy.
Green Wombat 
Think represents a desirable direction in transportation, and we ought to be working on opening up the market to it, and similar types of vehicles.
The whole green energy market would benefit from actions we need to take just to stabilize the price of oil, namely taxing gasoline consumption and higher tariffs on oil imports. Raising taxes on oil consumption will effectively put a cap on the price of oil by moderating consumption, and it will generate funding for green energy projects, including the supporting infrastructure for electric transportation.
Think is just one company, but the market it represents is a strategic necessity. I think global warming is a real issue, but it doesn’t really matter, one way or the other.
We know planetary oil reserves are limited, and we know we can’t burn all the world’s fossil fuels without rendering the atmosphere unfit to support life. We have to deal with a future without so much oil, and the longer we take to start the transition, the more it will hurt.
It’s too bad entreprenuers like this are caught in the economic storm. There is cash out in the world. I only hope it finds its way to companies like Think.
Look…probably anyone that bothers to read this blog is for electric cars, and routing fro Think, but the numbers on this car don’t make sense yet. As Michael Kanellos at Greentech Media points out “The car costs about $42,000 if you planned to own it for seven years. That’s a lot for a car that, if brought to the states, couldn’t even hit the 65 mile per hour freeway speed limit. (Technically, I don’t even know if it’s freeway legal. Think sells it for city driving.)”
see article at : http://greenlight.greentechmedia.com/2008/12/16/think-halts-production-of-electric-cars-begs-for-money-860/
or just go to : http://www.greentechmedia.com/
Another alternative: Last month China pocked US$ 40 Billion in cash from rest of the world and US$ 25 Billion from U.S. – that is more than a Billion a day, and/or US$ 41.67 million per hour.
So, for what we give the Chinese in one hour, we could buy, as in bailout, this very good program/idea.
Or, they could sell “bonds” for the “Chinese” rights to build this in China for China.
Or, since the Japanese are also sitting on US$ 750 Trillion U.S. bonds, sell the Japanese bonds.
But, don’t sell them US$ 40 million, make it 100 or 250. They have it, Think who needs it.
Think is a beneficiary and victim of free enterprise. That’s how it goes.
In any event, nobody cares about green cars any more – gas prices are falling, and people buying SUVs like crazy. I just bought a truck myself. Gets 12 mi/gall, 19 on the highway. Oil rocks. None of this fru-fru electric stuff.
Hey Google! If you reading this, lend a hand. The world needs more Thinks now.
The West is doing something fundamentally wrong. In India we can buy an electric car called the ‘REVA’ for $8,000, which has been around for the past 5-6 years.
Why is the Think so expensive? Cut costs and it will become viable. Your labor costs are too high, to support your gluttony.
The Western industry seems to be thinking (pardon the pun!) like communists now, depending on Govt. bailouts to survive. grow-up!
You would think the energy deficit European Government officials could look ahead enough to see that they need this car at any price. What we pay next to nothing here in US -where we import 2/3s of our gas/oil. In Europe – they are nearly totally dependent on imported fossil fuel. Think manufacturers need to start with government and social support purchases (gov officials, police, social services – just to cut the cost of doing gov business) – then lean down the production co$t$ to the average consumer budget and open manufacturing up to Asia & US. Start by documenting Arnold test driving one – and see how many he wants for California.
Now is NOT the time to abandon this technology. The world needs to move forward aggressively AWAY from oil based automobiles. OPEC is down, maybe they will soon go bust!
What the Europeans need is an energy infrastructure that runs off the posturing hot-air of Brussels.
I know it’s a crazy thought, but with how many people there are in the world willing to pay a little extra for environmentally friendly options. And with the fact that, as they say demand is high at this time. Would there not be a way that they could get enough money from the ‘average Joe’ to ensure the company’s survival?
Since when are we completely dependent upon the rich and the entrepreneurs to provide financing for companies? Whatever happened to the idea of people supporting companies? In the end it’s the people that make or break a company anyway, no entrepreneur buys enough items from a company to justify their continued existence, it’s the people purchasing that the entrepreneurs bank on. So why can’t we invest in the company ourselves?
I would be nice to see Think get saved. The biggest thing that needs worked on for the electric car is the charging time. The day I can charge the car as fast as I can pump gass I will do it. Until then the car is no good for me as I would need to have 2 cars just incase I needed to go further than a few hundred miles.
American’s are such fools. Just because oil is cheap now doesn’t mean it will not go to $4/gallon next year or the yer after. If we stop developing this technology now, we will never be prepared for when oil gets really expensive.
Most electicity in the U.S. is from burnig coal. This is a coal powered vehicle unless you live next to a hydroelectric plant, right?
you cover the environment + tech. i cover the environment + rock. let’s record a cd or something. like the blog.
– green mullet
http://greenmullet.com/
Why is no one talking about Compressed Natural Gas(CNG) as about a fuel of the future. There is a company, Cummins-Westport (WPRT) that makes an CNG engine that has a 21% lower emissions than the current diesel engine technology. Read this article
http://biz.yahoo.com/iw/081208/0458710.html