NEVS announced two new minority shareholders this morning: the city of Tianjin (THT) and Beijing State Research Information Technology (SRIT). While this is a significant step forward, there are more partnership announcements to be expected. No mentioning of SAAB yet though ...
"We're only announcing when things are ready"
An email from NEVS 'communications department from earlier this morning contained an invite for a press conference at 11:00 CET hosted by NEVS president Mattias Bergman. Very short notice, yet the overall timing wasn't unexpected as NEVS had been consistently stating that they would be announcing new partners shortly after leaving the reorganization phase.
Today's announcements in one sentence: two new Chinese minority shareholders, a new global factory in Tianjin and a technology R&D partnership, a -to be announced- global electric vehicle portfolio and new additional partners to be announced soon.
More details are in the press release below (which incidentally, hit the wire two minutes before the press conference started), but this seems encouraging news from two perspectives: it offers a new entry into the Huge Chinese market and it secures the role of the Trollhättan factory and R&D center, and according to Mattias Bergman NEVS will start recruiting and use of additional consulting resources in Sweden again very soon.
NEVS is also reporting that $ 40M has been paid for today by the new minority owners, which is why it will pay them their outstanding debts in a recent agreement with the creditors and become debt-free.
More announcements coming soon
Mattias Bergman talked about a “ketchup effect” (ie things taking a really long time before they initially get out but once out, more starts flowing rapidly; just the same as with trying to get ketchup out of a bottle); there will be more partners announced and the business plan is being updated at the moment. Bergman mentioned that they see three partner categories: industrial, technological and financial, and that they will be announcing additional partners in each of the categories soon. The two other “Asian vehicle manufacturers” (earlier rumored to be Mahindra from India and Chinese Dongfeng) NEVS confirmed to be in negotations with since last year, are still in the picture.
Apart from producing their own environmentally-friendly electric vehicles and range extenders, NEVS is working with other manufacturers to sell unused production capacity in the Trollhattan factory and to assemble cars (thus with conventional engines) for other brands.
When the new business plan is ready NEVS will be announcing the new global product portfolio and production volumes and dates shortly. Bergman then added "we're only announcing when things are ready".
So more news to be expected soon, in particular around the new majority share holder and in particular the license to use the SAAB trademark. To that latter point, Mattias Bergman stated on the press conference that "SAAB is really super important to us and it's part of our business plan. The SAAB DNA is in the walls here and it's crucial to our customers and Trollhättan. The dialogue with SAAB AB is ongoing".
So now what?
I must admit that I've been intrigued by the number of skeptical and plain out negative comments on the Internet in response to today's announcements. Sure, NEVS isn't there yet by a long shot but are they claiming this? No news today about Mahindra, Dongfeng and the SAAB trademark. Does this mean that there won't be any positive developments anytime soon that provide the necessary strong foundation and long-term commitments to build SAABs again? No, not necessarily. NEVS has so far held more or less all their promises, so when they are saying now that there are more partner announcements coming shortly, why would that by definition be questionable as many respondents claim? I'll try and address the two most common themes:
SAAB's historical experiences with foreign investors (and Chinese investors in particular) has not been all positive. The memory of Victor Muller's dramatic developments with several potential partners from China like Youngman, Pangda and Hawtai is still fresh. NEVS had themselves with minority shareholder Qingdao, which led to the subsequent reorganization. So this impression of chinese partners being unreliable is easily made. But are they really? THT, SRIT and / or any additional Chinese partners are as strategic and dependable as NEVS wants and needs them to be. China surpassed the USA not so long ago as the world's largest economy. The city of Tianjin alone has nearly 15 million inhabitants (more than the countries of Sweden and Denmark combined) and over 1.3 billion people live in the People's Republic of China. NEVS 'has been strongly rooted in the China from the very start. Majority owner National Modern Energy Holdings Ltd is a Beijing-based enterprise focused on renewable energy in China and is and was founded by NEVS chairman Kai Johan Jiang. Continuing the journey now with THT and SRIT seems to be a logical step towards securing both the access to this huge market as well as access to key technology (SRIT is said to focus on advanced vehicle communications and self-driving cars). Why should it work this time then? Again, time wants to say it will all pan out as planned but both THT and SRIT have a strong connection with the Chinese state (while Qingdao did not). That connection may sound strange in many westerners' ears but is in the current political and economic climate. All foreign car manufacturers have a local joint venture partner in China and I guess the best one is Geely, current owner of Volvo Cars.
The SAAB brand
There was no news about the negotiations with defense & security company SAAB AB about the license to use the SAAB trademark. Well, my sense is that Mattias Bergman was more specific than in other recent interviews about the fact that SAAB is crucial for NEVS. This was confirmed in several other conversations I have had with NEVS representatives over the past months and I know the whole of Trollhättan wants it. The problem seems to be in Linköping (where SAAB AB is headquartered) or more specifically the legal department there. Many rumors have been spread recently about what demands SAAB AB has and that NEVS would “never” be able to fulfill them. I am unfortunately not close enough to the matter at this point to put the finger on the sore spot, but there HAS to be a solution. As much as SAAB AB supposedly had issues with negative publicity around the issues related to the Trollhättan-based car manufacturers, I would claim that the SAAB car brand is the one that actually makes SAAB AB known around the world. With the right license agreement in place iconic SAAB cars will continue to be produced, which will also benefit SAAB AB, in the same way it works for brands like Rolls Royce and Volvo. NOT having an agreement in place however essentially means the destruction of this iconic brand and downgrades the value of NEVS tremendously. I have strong faith that SAAB AB will see this value as well and come to an agreement, soon.
SAAB is not dead, long live SAAB!
Nevs grows with two Chinese strategic part owners
Together with two new Chinese part-owners Nevs wants to establish its second global factory with focus on electric vehicles and a second global research and development center in the city of Tianjin, neighboring Beijing City and Hebei Province, three highly-integrated economic regions with a population over 100 million.
Tianjin City's Tianjin Binhai Hi-tech Industrial Development Area (THT) and Beijing State Research Information Technology Co., Ltd. (SRIT), Nevs has got two new strategic partners.
Tianjin is one of the largest coastal cities in China and has significantly promoted new energy vehicles both in the form of consumer subsidies and official procurements.
The Tianjin city's fast growing national level demonstration zone is embracing a long history of automotive industry. Here is where the joint venture production plans to be built. This will give Nevs a strong foothold on the growing EV market in the area and China, as well as provide Nevs access to the existing automotive supplier base in the region.
SRIT is a pioneering IT service provider by China's Research Development Center of the State Council and the giant telecommunications giant China Unicom.
It is a unique possibility to connect to the future of the automotive industry, the cooperation with SRIT and its owners wants to give it a try. SRIT as a partner wants open up more opportunities for Nevs.
The first car that will be produced in Tianjin is an electric vehicle based on Nevs 'technology, followed by a diversified EV and portfolio of battery electric vehicles and EVs based on Nevs' newly developed vehicle architecture.
"Nevs' focus is on producing high quality electric vehicles with China as its initial main market. The long-term cooperation with the development area THT in Tianjin and the IT pioneer SRIT wants to help us achieve our vision and our goal of a global strategic presence and an important addition to the resources in Trollhättan, "says Nevs president Mattias Bergman ,