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Saab, Aptera, Think: Can China, Russia Save Electric Cars?

 
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Last week, something miraculous happened: after more than a year of being prepped for burial, Saab rose from the dead.

Of course, there had been previous attempts to revive the quirky car company -- notably, one led by Chinese investors Pang Da and Youngman (subsequently, a Chinese bank and Youngman). However, General Motors 86ed those efforts, because even though GM no longer owns Saab, it does own much of Saab's technology. Given China's passing acquaintance with intellectual property laws, GM worried that selling Saab to a Chinese conglomerate would be like publishing its trade secrets on Wikipedia.

Saab's potential new owner is National Electric Vehicle Sweden AB, which sounds European but is, in fact, backed by one firm from China (National Modern Energy Holdings, Ltd.) and another from Japan (Sun Investment). To the best of our knowledge, GM hasn't commented on the proposed deal, but the company may be willing to let it slide for one big reason: the new Saab will be an electric car company.

The deal is still in its very early stages, but reports hint at a reborn car company that will maintain many of the Saab design elements we've come to know and love/loathe. Beneath the hood, however, will be an electric car with little if any legacy technology from GM. No GM tech, no GM worries.

If the deal goes through, fans will get their beloved car brand back, electric car junkies will have a new marque to gush over, and GM's technology will remain protected by American law.

The bigger story

But thanks to an article from Pike Research, we began to wonder if there weren't more to this story than simply the reinvigoration of a beloved auto brand. You see, National Electric Vehicle Sweden AB was formed because Chinese and Japanese investors are betting heavily on the electric car industry. And why should they spend years creating and launching a new brand in a crowded market when they can just take over an existing company and rework it?

More importantly, Saab isn't the first company to which this has happened. 

Last year, Think -- the maker of the Think City electric car -- was sold to Electric Mobility Solutions AS, which is backed by Russian plutocrat Boris Zingarevich.

And just last month, Aptera -- known for its three-wheeled electric vehicle that looks like something out of The Jetsons (minus the power of flight) -- was bought by a group of investors headed by the Jonway Group, a Chinese firm that owns another electric car company, Zap.

Which leads us to a theory...

During Communism's heyday, the Western world was enjoying a petroleum-fueled auto boom. Auto companies proliferated, competition was fierce, development was fast and furious. 

By the time that Communism began to fail -- around 1990 for the Soviet Bloc and a few years later for China -- the auto market was saturated. Russian and Chinese brands couldn't compete against rivals that had been evolving for decades under the demands of consumer-driven economies.

Even though we're driving less nowadays, there's still plenty of money to be made in automobiles; the question for Chinese and Russian investors is how to make it.

The answer is simple: get ahead of the game.

There are a lot of people placing a lot of bets on the future of the auto industry. Electric vehicles may not be profitable tomorrow, but in the coming years, they're going to be an increasingly safe wager. So, many long-term investors have their eyes locked on the electric car market.




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Comments (9)
  1. Another illogical attempt to place the future of electric cars on the shoulders of automakers, companies which have practically zero control over the practicality of EVs. It's the batteries, fellas, the batteries. Everything else can be characterized as essentially insignificant and irrelevant.
     
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  2. Good point, it is the batteries. Nobody in China needs Saab to do an EV, nor Aptera (I mean really...). What they need is good, affordable batterytech that would make an EV an affordable, practical mass market proposition, the sort they can't blatantly copy yet simply because it's not quite there yet. So it's safe to assume that when a Chinese front firm bought Saab they had different motives than the notion that this bottomless pit could be a healthy start for what's basically a loosing proposition for most parties at this point anyway: EVs.

    China is not going to save EVs, but EVs could save China at some point once western research finds the miracle battery that could set Chinese mass motorisation on a different track.
     
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  3. Don't be so smug about China's ability to innovate. Yes, China is famous for copying, but by doing this they have learned quickly, and they have lots of universities doing advanced research in many areas including batteries. They didn't buy Saab because of its electric know-how, they bought it because it is quicker to bring a car to market with the tooling and most of the design already done. They would not have made the announcement without already having selected the electrical components (Fisker Karma electric motors are made in China, and in fact are a Chinese design) and batteries.
     
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  4. I note in this article that GM is OK with the Chinese buying SAAB because they are going to make it an electric car company. Funny that they are not worried, the same way American automotive companies were not scared of the Japanese cars, that nearly put them all out of business because they were not worried and refused to keep up with the technology and quality. In the automobile industry, you just can't rest on your laurels like the American Auto Industry likes to do. Technology will pass you by. Like it or not, the electric car does make sense, and will be the standard in the near future.
     
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  5. @Carl: Ummmm, correct me if I'm wrong, but weren't the first and third modern plug-in cars on the market from American companies?

    And at the moment, hasn't that one of those plug-in cars outsold the other volume entry, the one from Nissan, by roughly 4,000 units as of the end of June in the U.S. market? And would that be the one from, ummmmmmmm, GM?

    It's very early days yet, but I'm just sayin' ....
     
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  6. Carl: When we say that GM is "okay" with the Chinese buying Saab, we mean that they are comfortable with the legal aspects of this particular deal. Obviously, they'd rather not face additional competition in the auto market -- what company would? -- but unlike the last proposed buyout of Saab, GM doesn't have much room to complain this go-round.
     
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  7. I don't believe the existing competition from Western companies insurmountable. If it were we would not have seen Hyundai and Kia emerge to the level they have been able to in this saturated market. It just shows that if you introduce an exciting and innovative product (as Tesla shows it doesn't even have to be affordable)you can move a lot. And with the investment in alternative energy in China and the access to battery technology from e.g. Panasonic/Sanyo, etc. these investors now have all the parts to quickly develop a solid product. @Kent: sure it's the batteries. But if you're a battery company and something up your sleeve there already what you need is a car platform - those aren't easy to develop either, so buying the is a smart move
     
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  8. China has another reason to move as quickly as possible to electric transportation, it's the horrible air quality they have, it's choking the life out of people there. A few years ago China had the Olympics there, athletes from around the world threatened to boycott those games because of health concerns over air quality. The Chinese government closed many factories for two weeks before the games began to try and clear up the air problem and it made very little difference.
    China recently passed some clean air standards and guidelines that will affect future vehicle sales. leaders finally realized that there might not be many Chinese left alive in the larger cities if they don't get serious about cutting millions of poluting cars.
     
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  9. @Gene: Actually, I believe the air in Beijing during the Olympics was cleaner than residents had seen it in many years.

    That was certainly what mainstream media reports said at the time, underscoring your main point, which is that China has no effective environmental regulation at all.
     
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