After baiting its hook with a $3 million tax incentives package, Elkahart, Ind. has finally reeled in Th!nk North America’s new electric vehicle manufacturing plant, a facility that represents $43.5 million in local investment and as many as 400 jobs by 2013.
This just goes to show how much states and municipalities are willing to risk to jumpstart their flagging automotive industries by greening them these days. Just look at the bidding war going on between Long Beach and Downey, Calif. to attract Tesla Motors’ new Model S assembly plant, or Michigan’s massive $300 million tax cut for advanced vehicle battery companies. Oregon too is hoping to push through legislation to make it easier for EVs to hit the road in the state. This is a lot to be betting on a business that has yet to launch its biggest products.
And we might find out whether it’s all worth it in 2010. With the launch of General Motors’ Chevy Volt sometime this year, and Fisker Automotive’s Karma, Nissan’s Leaf and Mistubishi’s i-Miev following soon after, we’ll see if the market is as enthusiastic about plug-in vehicles as the government seems to be.
As for Th!nk North America, the joint venture between Norway’s Th!nk Global and American venture firms Kleiner Perkins Caufield & Byers and Rockport Capital Partners, Indiana isn’t a shocking choice. Last year, the company announced a battery supply deal with Ener1, which will conveniently be just down the road from its new Elkhart plant. Shipping the heavy and expensive battery packs is a pain, and expensive to boot.
The primary Th!nk car model, called the City, has a plastic body and a driving range of 100 miles. Its biggest caveat? Its top speed still lingers around 62 miles per hour, making it only appropriate for street driving and shorter distances. Still, it’s one of a short list of plug-in vehicles to watch over the next several years.
While the facility will take millions of dollars to renovate and bring online, it should have the ability to churn out about 20,000 cars a year, with the potential to expand. Given that it plans to charge $30,000 per vehicle, the plant could bring in some nice returns. The only thing that’s uncertain now is where Th!nk will get the money to turn the existing Elkhart structure into a humming factory.
So far, Th!nk has made a formal request for stimulus funding through the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing program, but its application is still pending. Its competitors, like Tesla and Fisker, have received generous sums via the program — $465 million and $528 million, respectively — which have given them a fairly substantial head start. But this doesn’t necessarily spell doom for Th!nk, which plans to sell much more affordable models and for different purposes than both of these companies.
The one hitch: Th!nk isn’t the most financially stable company in the world. The North American venture spun off from its Norwegian parent when the latter went bankrupt in 2008. Still, its cars are on the road in Europe, and it has a waiting list of about 2,300 orders still to fill.
You’d think the government would be willing to finance the company’s plant, seeing as how its taken flack from the media and analysts for doling out so much money to Tesla and Fisker, which both essentially build luxury cars out of economic reach of most Americans. The Chevy Volt will certainly beat Th!nk’s cars to market, but it could eventually provide an affordable alternative not made by one of the traditional automakers.