Almost exactly a year ago, Mark and I visited the old Saab factory. They were very friendly to us, and we met impressive people with Saab's past. Still, by the end of the day, the mood was dim.
Losses of 346.000.000 €
Was it the missing sun, the approaching winter? Or was it simply the tiredness after a night on the ferry in Sweden, where I had hardly slept? It may have been our last visit to the plant, I noted at the evening revue-pass-let. What at that time was only a dark premonition, that could be actuality.
Our contact persons from that time work today for other companies. Contacts we have had over the years have retired or faced new challenges. The signs are on storm, and NEVS is still looking for long-term funding.
NEVS, the Chinese electric car startup in the Stallbacka, is burning money. Since the year 2012 the losses totaled over 346.000.000 €. Alone in the year 2016 ran around 100 million €. Nobody dares to say when NEVS could be profitable. In the 2016 annual report, which was filed with a delay of more than two months, the auditors expressed doubts about the continuation of the company over the coming 12 months.
NEVS is planning to sell New Long Ma
In an article by Dagens Industri the whole drama becomes obvious. NEVS is trying to sell the 50% stake in New Long Ma. In the Adoption in August 2016, it was predicted that the breakeven point for 2017 would be reached. There is no talk of that. Our information speaks of ongoing losses and unsatisfactory quality of production in southern China. The investment is expected to have an intrinsic value of 52 million euros, which should now be converted into liquidity.
Because liquidity NEVS urgently needs. Invoices from suppliers can not be paid on time, the financing of pre-production in Tianjin is unclear. In order to fill the most urgent holes, the Chinese are planning the real estate in Trollhättan with around 84 million € hypothecate, More money should bring the entry of Didi.
The Uber rival, it was hoped, could get into Trollhättan with 500 million US dollars (426 million €). Apart from a letter of intent in June, there are no tangible results. According to one DI Interview with CEO Tilk, they are now negotiating smaller partial amounts. 25.000.000 US dollars (€ 21 million) are to flow. It is questionable whether Didi will even get on board. Rival Uber recently closed its leasing business because of excessive losses set.
The entrance of Didi is more than doubtful.
It is doubtful whether the Chinese market leader Didi will embark on a similar adventure with financing a hardware supplier. Spicy: Also a major customer Panda New Energy relies on a comparable, possibly deficient business model. It is, in his own words, fully credit-financed. The future will show just how valuable the previously non-binding orders are.
Trollhättan currently has some 750 employees and 125 consultants on its payroll. High performers continue to leave the former Saab factory. The most recent, prominent departure was Chief Technology Officer Stig Nodin. With 25 years at Saab one of the last known names from an earlier time. He remains connected as a consultant, which is nothing more than a common phrase at NEVS.
The activities are increasingly shifting to China. In Trollhättan staff are being dismantled, hired in China. Around 200 NEVS employees should be busy there. This is done under pressure from the lenders and is funded by a loan from Tianjin Bank. A credit line of 125.000.000 € tied to investment in Tianjin keeps the activities alive and provides the necessary liquidity.
To read more about the difficult development in Trollhättan, the background and the incredible gains in Sweden in the following article in Tom`s rear view mirror.