Saab has languished in bankruptcy limbo since the end of last year, but this week a deal was announced that aims to reinvent the Swedish carmaker as a manufacturer of electric vehicles. Saab’s assets are being purchased by a new holding company, National Electric Vehicle Sweden, whose primary investors include National Modern Energy Holdings Ltd., a Hong Kong-based builder of renewable energy power plants, and Japanese investment firm Sun Investment. The price of the deal wasn’t disclosed.
The first new vehicle to be developed by Saab’s new owner will be an electric car based on Saab’s 9-3 model and is planned to debut in early 2014. China will be the vehicle’s initial target market. The cars are to be developed and built at a facility in TrollhÃ¤ttan, Sweden.
This deal struck me as an odd one. Making Saab run smoothly will involve reviving a nameplate that has lost money for nearly 20 years. And going all-in on an electric car venture seems inordinately risky given the safety flaps earlier this year with GM’s Volt and Fisker Automotive’s Karma; the US National Highway Traffic Safety Administration has been looking into fires associated with those models. Add to this the disappointing sales of the Volt and the Nissan Leaf, and one wonders if even the white-hot Chinese car market will be enough to finally get Saab off life-support for good.
“Electric cars are a very tough business with a lot of risk,” and “there’s been almost no demand for them,” according to Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, Germany. Electric vehicle sticker shock and the vehicles’ limited range have so far deterred widespread consumer acceptance.
That’s not to say that EVs won’t eventually get to break-even, but given Saab’s long track record of financial losses, multiple owners, and failed turnaround schemes, it’s difficult to see how the latest Saab deal will wind up being the first chapter in the electric vehicle’s success story. Then again, whoever thought we’d ever again see the words “Jaguar,” “Land Rover,” and “profits” in the same news story?