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Think Went Thunk: What Does Electric-Car Bankruptcy Teach Us?

 
1,695 views Jul 8, 2011
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Assembly of Think City electric cars, Elkhart, Indiana, Jan 2011

Assembly of Think City electric cars, Elkhart, Indiana, Jan 2011

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A little more than three weeks ago, Norwegian electric-car maker Think Global declared bankruptcy--for the fourth time, actually.

In a pithy piece published a week later, Pike Research analyst Dave Hurst suggested a few lessons that can be learned from Think's latest collapse.

The entire article, linked below, is worth reading for the data and details behind Hurst's lessons learned.

But condensed down to their essence, they are:

  • Size Is Important: Even in Europe, tiny two-seat cars like the Think City have a limited market;
  • Price Is Very Important: At $36,495, the two-seat Think City cost $3,715 more than a four-door, five-seat 2011 Nissan Leaf;
  • Brands Count: Think was unknown, whereas Nissan is well-established, with ubiquitous dealerships.

Think's new factory in Indiana is now idle, since it's no longer receiving City electric-car kits to asemble.

PHOTO GALLERY: Think City Assembly Plant Tour, Elkhart, Indiana

We've said before that electric-car startups face a bleak future due to tough competition from established carmakers, who are finally taking plug-in vehicles seriously.

Tesla Model S Alpha build

Tesla Model S Alpha build

Enlarge Photo
Even if they succeed in the short term, we think makers like Fisker Automotive and Tesla Motors will ultimately be sold to global auto manufacturers--for their brands, and perhaps their expertise.

Their executives, including Tesla CEO Elon Musk, dispute this vigorously.

But we're curious: What do YOU think the electric-car world has learned from the latest bankruptcy of Think?

Leave us your thoughts in the Comments below.

[Pike Research]





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Comments (9)

  1. CDspeed avatar CDspeed . Posted: 7/8/2011 3:12pm PDT

    The lesson electric car makers should take from this is, deliver a car that has the design and features to match the asking price. You can't sell a car that is inferior by economy car standards at a near luxury car price. And you need to promote yourself, brand recognition is very important if you want to be successful you need to make the public aware of who you are and what you do.
     
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  2. jamcl3 avatar Jim McLaughlin Posted: 7/8/2011 3:14pm PDT

    There have been rumors of a rescue for some time, and now BD Otomotiv confirms they are negotiating to rescue Think.

    The Think is way too good of an EV to let it go down. It is the only EV on the market that was designed from the ground up as an EV so it is big on the inside despite being small enough outside to park easily in mega cities. The battery gauge is far more precise and reliable than the one in the immature Nisan Leaf, which is the most important consideration for ANY electric car. This is why I never have range anxiety in my Think EV.

    I never believed that an EV this mature would be allowed to die in the current pro EV climate. I am only surprised that the interest is not coming from a bigger US corp.
     
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  3. fb_100002544459353 avatar Ramon Leigh Posted: 7/9/2011 5:30am PDT

    The major automakers are pursuing EVs is various
    ways, most often by taking an existing ICE platform, tossing out about 1000 parts and stuffing a battery pack and electric motor in their place. Considering the high cost of batteries, and low volume of EVs
    (they simply aren't selling in large numbers, and for very good reasons) that strategy certainly makes sense.
    Right now Tesla is way ahead of the pack but any major automaker buying them would be placed in a rather odd situation and it seems unlikely that that will happen.
    Certainly Musk didn't go thru all he did just to make a few more bucks by selling his company. That was never his goal, as should be painfully obvious to everyone. He controls Tesla and he's not selling.
     
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  4. john_v avatar John Voelcker Posted: 7/9/2011 5:45am PDT

    Ramon: As we've noted elsewhere, current electric-car sales numbers reflect the constraints of slow production ramp-up, and have nothing at all to do with actual demand: http://www.greencarreports.com/news/1060899_nissan-doubles-leaf-sales-volt-stays-steady-some-perspective-please

    And most auto industry analysts would disagree with you about Tesla staying independent. Musk is a major shareholder, but in the end, the board and shareholders will decide if it's to be sold or not:
    http://www.greencarreports.com/news/1060551_elon-musk-says-tesla-wont-be-sold-but-elon-musk-is-wrong
     
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  5. Noel Park avatar Noel Park Posted: 7/9/2011 12:10pm PDT

    I think that you've pretty much said it all. I cannot imagine that these startups will survive in the face of GM, Nissan, Mitsu, et al. It's just a matter of time. If they had gotten to market 5 years sooner, maybe. Now, no way.
     
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  6. artv avatar art vatsky Posted: 7/9/2011 12:14pm PDT

    Granted, the TH!NK is a niche car. Both its price and its weak corporate stability are the negatives I see. Perhaps a price about $15k and leased batteries would have made it feasible.
     
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  7. fb_100001278055003 avatar Trudee Lunden Posted: 7/9/2011 12:29pm PDT

    Hi John, there's an old saying "You get what you pay for." In Think City's case, you didn't. From the product side, that's how consumers see it - not just for its small size, but also the driving experience, which is critical. I also agree that Brands matter greatly for their established worldwide marketing and dealership networks. As in the Music Industry, independents have a much harder time reaching the masses vs. major record labels. However, what's unique to the auto industry is that nothing sells a car better than a test drive; so without proper distribution channels, it's a tough road indeed to drive business forward. I believe this is Tesla's biggest obstacle and that down the road Tesla and Toyota will integrate these efforts too.
     
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  8. fb_100001444034909 avatar Richard Marks Posted: 7/10/2011 1:34pm PDT

    Lots of good toughts but but you need to be sucessful in automotive is core OEM knowledge in the company's top management. Think did not have that. Financially, they did not know what they needed to do or how much these would cost. It is the things people do not know, that they do not know are the killers.
    Tesla and Fisker are in this same boat and with all they do not know, they do not know, they will fail. Neither of them have anything that an OEM would want.
    For a succeessful EV start up look first at their top management and their OEM experiences.
    Good Luck.
     
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  9. Roy_H avatar Roy Harvie Posted: 7/10/2011 9:31pm PDT

    It is almost impossible to believe that Think would be rescued a fifth time. If somebody does, then they would need a remarkable plan to cut the price of the Think in half.
     
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