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Norwegian electric car maker Think just veered off the bumpy road it had been driving on, and fell square into a ditch. On Wednesday Think’s lithium ion battery partner Ener1 (s HEV) revealed in a filing that after failing to raise the funding it needed, Think plans to file bankruptcy proceedings in the Norwegian courts.
Think has reportedly confirmed that it has filed for bankruptcy, and has also said that while Think North America was not included in the bankruptcy, the Norwegian company will determine what happens to the U.S. arm. Just six months ago, Think launched its Think City electric car in the U.S. market delivering U.S.-made cars, built at its factory in Elkhart, Indiana, to the state of Indiana for a government fleet.
A lot of twists and turns have led up to this dismal state of affairs for the twenty-year old Think. In April, the Norwegian business newspaper, Finansavisen, reported that Think was having financial trouble, had stopped production of its cars in Finland, had laid off 35 employees, and was looking for more funding.
Ener1, which previously held 48 percent of the voting power of Think, announced last month that it had written down a $59.4 million impairment charge for its Think investment and that it would know longer fund Think, partly because Think had stopped production and had run out of money. The market for electric vehicles has been moving more slowly than expected, Ener1 added.
As a result of its impairment charge for Think, Ener1 reported a net loss for the first quarter of $84.71 million, dramatically more than the $15.46 million net loss for the quarter the year earlier. Ener1 also adjusted its 2011 revenue to reflect the halted Think shipments. Ener1’s shares are trading at $1.19.
Ener1 says in its filing from Wednesday that it has a material impairment of $35.4 million from its Think investment, which could be subject to change if Ener1 can recover any money from the Think liquidation. But Ener1 is not optimistic it will recover any money: “we presently believe that any such recovery, to the extent it occurs at all, is not likely to be significant.”
Think had previously planned to start selling the Think City to U.S. consumers in mid-2011, projecting to sell between 2,000 to 3,000 cars via three to five stores. Think had planned to expand its Indiana factory in mid-2011 from 25 local workers to more than 415 by the end of 2013. Think had also been looking for a loan from the DOE’s highly competitive Advanced Technology Vehicles Manufacturing Program, and had formed a U.S. joint venture three years ago with Kleiner Perkins and RockPort Capital Partners.
Given Think Citys may never be driving U.S. roads in any real numbers, you should check out our test drive of the Think City from last year: