Another electric car maker is feeling the pinch of the global credit crisis. Norway’s Think halted production yesterday, with CEO Richard Canny telling reporters that his company is in “urgent financial distress.” Canny said the company was seeking state aid to get Think back on its feet, but this morning Reuters is reporting that the Norwegian government said it won’t intervene to save the car maker.
“There are many companies that are in a demanding financial situation because of the financial crisis,” 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.”
In September, Think was reportedly looking to raise a third round of funding of about $80 million to boost its production capacity. There’s no word on the status of that funding, but Think isn’t the only startup struggling to find more financing these days. Electric car superstar Tesla Motors in California is trying to build a manufacturing plant in San Jose to boost production of its sports car and to begin production on a new line of electric sedans, but the company said it needs a $200 million loan guarantee from the federal government to get it started.
And any plans for electric and hybrid vehicles out of the Big Three in Detroit are in serious jeopardy after the failure of a Congressional bailout bill last week. But the outgoing Bush administration has now said it will tap the $700 billion financial rescue fund for the struggling automakers, although they’ll have to wait until President Bush gets back from his trip to Iraq before anything is decided.
Think temporarily stopped production at its Norway plant — its only facility — laying off between 50 and 70 percent of its workforce. The company said it needs 100-200 million kroner ($14.5 million to $29 million) in short-term guarantees to keep operating.
Think only just started production on its new electric vehicle, the Think City, and news of the shutdown could put a North American venture in question. In April, Think formed Think North America in partnership with its investors RockPort Capital Partners and Kleiner Perkins Caulfield & Byers. The venture had originally planned to start selling the Think City in the U.S. this year, pricing the car at under $25,000 — less than the cost of a Prius.