NEVS reboot in Trollhättan?

Yesterday was exciting. Published in the morning Sveriges Radio plans for another NEVS factory in Shanghai. A message that sounds strange given the fact that another factory in Tianjin is still not finished and that the old Saab plant is being dismantled. Three plants, two continents, no production.

But there was the press conference scheduled for 13.00 with Minister of State Löfven. And that, surprisingly, brought good news. The NEVS AB was able to GSR Ventures commit a new wholesale investor. 500 million US dollars are to be invested, and GSR plans a battery assembly factory in Trollhättan.

The event is positive and could fundamentally change the situation for the former Saab factory. Firstly, the agreement, whose binding nature is not entirely clear, relates to the NEVS AB. So on the Swedish part of NEVS and not on the Chinese joint ventures. Secondly, a battery assembly in Trollhättan could sustainably strengthen the location.

GSR Ventures typically invests in startups at a very early stage. DiDi Chuxing is one of the best-known investments, last year the Chinese bought Nissan's battery production. Since then, they have strived to expand a global presence. A battery production in Turkey, as part of the national car project, is one of them. And now also NEVS and Trollhättan.

The investment of 500 million US dollars will be in the form of convertible bonds that can be exchanged for shares in NEVS AB. The timetable and the amount of funds that could flow immediately remained unclear yesterday. In addition, the question remains whether the Chinese authorities have already approved the money transfer. Should the transactions take place, they could have direct consequences for the ownership structure of NEVS AB. GSR Capital could become major and major shareholder of the company if the bonds were exchanged if the previous owners did not seek a capital increase on their part.

NEVS back in business?

Yesterday in bright sunshine there was a good mood in Trollhättan. Mayor Paul Åkerlund said they were “back in business”. You could agree with him if it weren't for a startup called NEVS.

In recent years, NEVS has filed for bankruptcy at the expense of Swedish taxpayers and suppliers. And besides, it did not reach just about any goal that was announced. Mistrust, based solely on this experience, is appropriate.

The entry of GSR Capital at least avoids the current risk of a second bankruptcy. Is it also the turning point for Trollhättan and also for NEVS? It would be possible for GSR to provide the financial boost and, with an exchange of management, the seriousness that did not exist before.

The construction of the new car factory in Shanghai is scheduled to start in May, Tianjin is scheduled to start production in summer. The Nissan AESC battery factory could be built from 2019 in Trollhättan, they could deliver batteries for 400.000 to 500.000 vehicles a year.

$ 500 million is a lot of money. But only a small, initial start-up financing if you want to build a brand. For comparison: Li Shufu has invested more than 10 billion US dollars in revitalizing Volvo. A Saab rebirth that some have been dreaming of since yesterday is not within reach. But it could well be that a new perspective opened up yesterday. I don't dare to make a prognosis. The next few months will tell what happens.