Sweden’s worst kept secret – Saab to be sold to electric car company NEVS

I wasn’t going to write about this until something came out officially, but as it’s officially now Sweden’s worst kept secret, I think we can talk about the impending sale of Saab and it’s future as a manufacturer of hybrid and electric vehicles.

John Travolta reacts to the electrifying news
John Travolta reacts to the electrifying news

Swedish newspaper SvD has come out with a report that aligns pretty well with whispers I’ve been hearing via more than one Djup Strupe in the last week or so – Saab will be sold to a company called National Electric Vehicle Sweden (NEVS).

SvD say that a deal was ready to be signed as early as last weekend, but last minute concerns and foot-dragging by the Swedish National Debt Office has delayed the signing and the announcement.

One would hope that all parties involved on the Saab/Government side would have learned that timeliness really is critical to missions like this. People can and will walk away if their investment time frames aren’t fulfilled (hello, Koenigsegg Group).

NEVS are a relative newcomer to the Saab sale scenario, with first reports (minus the company name) emerging just a few months ago. The fledgling company was only registered in Sweden this month and has some big Swedish names at the top to go with, presumably, some big Japanese and Chinese money in the bank accounts.

Saabs United report that NEVS plan to build what was essentially the Saab 9-3 ePower, along with a small electric vehicle for the Japanese market. They also plan to finish the 9-3 replacement based on the Phoenix platform, which I assume forms the initial hybrid part of their production planning and will involve cooperation with eAAM for the hybrid/electric rear axle.

I’m sure their plans must include more than this, however. They will need a car that they can bring to market in the very short term and these plans all involve what I would expect to be at least a 2-year lead time.

The 9-3 ePower was a great prototype, but that’s all it was. Saab had plans to introduce a test fleet of 70 ePower vehicles in 2011. I saw some of them being assembled at Saab’s frickeboa test assembly line, but that test fleet never eventuated and even if it did, it was for testing, not for production. Here’s one that I took a ride in at Saab’s Technical Development area last year.

——

Some further consideration to Saab’s future as a hybrid and electric vehicle manufacturer…..

I’ve had a say on this already. Twice, in fact.

In my first piece, I opined that hybrid/electric shouldn’t be the centrepiece of a car manufacturer’s strategy, that car manufacturers who are succeeding with hybrid/electric are only doing so because they’ve got a solid lineup of traditionally powered vehicles to finance the innovation:

The problem is that people don’t, won’t and in many cases, can’t buy these vehicles based on good feelings alone. The vast majority of people will select from a pool of vehicles that is based on price first. Factors like styling, safety, convenience, utility and reliability will also govern…..

….Simply put – Whilst we all like the nice, shiny image that hybrids/electrics project, the fact is that the market doesn’t have products available that are both utilitarian enough AND cheap enough to convince people to switch from more traditionally powered vehicles. Companies building solely electric vehicles are struggling and their customers are few and far between….

….I don’t know exactly what this new consortium has in mind, but the high cost of electric vehicles dictates that their future success will depend on development and manufacturing in lower cost countries. I’m 100% confident that the Swedes have the know-how to build great electric cars, but I’m not confident that the cost could be kept to a level that would make those vehicles a success in the marketplace.

I’m willing to stand by all of that. The market proves it, too. Hybrid sales are growing slowly but even Toyota has had to cheapen its Prius model down to the Prius C to finally leverage the kind of sales volumes people thought they might reach years ago.

Electrification of the automobile is pretty much inevitable, as far as I can tell, but electrification of the broader market is a long way off and I do fear for a new Saab putting all their eggs in the electric basket.

Having said that, I can’t wait to hear from this new company with regard to what it plans to do with Saab.

What sort of car company do they want to build?

Will it have links to Saab’s past beyond just the badge?

Will they even keep the badge? (something that’s not entirely up to them, but up to defence company Saab AB, who are interested in seeing Saab’s name continue to be associated with manufacturing operations in Sweden)

My most recent writings on this topic considered the obstacles this company’s going to have to overcome:

Any new owner is going to have to contend with incredible difficulties in terms of staff, dealer network, administration, marketing, engineering – and all of that’s before they make a single car. Even if there’s a small core of Saab personnel remaining within the wider organisation right now (and there is), this will essentially be a new organisation and they’re going to have a huge mountain to climb.

Doing all of that PLUS the electrification of a car for production is going to take some committed minds and very deep pockets. I’m very interested to see how they plan to do this and will be hoping like heck that they can.

Saab and the city of Trollhattan have been a very important part of my life and whilst this challenge seems almost insurmountable, I’m willing to bet that the right people can pull it off.

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57 Comments

  1. My concern with that SVD article is that it sounds like they want to produce electric Saabs (9-3s) for primarily China. Seems that the Chinese gov’t will heavily subsidize these sales. Happy for the unemployed in western Sweden , but what about Saab Parts? What about the rest of the world? Sad, very sad news.

    1. I don’t think we can draw any conclusions about that until we hear from them. But to give it a go……

      Parts will be OK. It’s a virtual cash machine.

      Designing and manufacturing in Sweden for exclusive/predominant sale in China doesn’t make any sense. The other way round would make perfect sense. They’re going to have to offer these everywhere they can, I think.

      As I said, I think we need to hear from them before we can make a call about what they’re going to do.

      1. I guess what’s a few more days, right? Any truth to earlier rumors that Mahindra was primarily interested in Electrics/Hybrids , as well? There has been so many twists and turns over the past few years, it’s difficult to separate fact from fiction. Ttela was burned badly on this one, by the “Indian media” that once told us that Tata was in the running. 🙁

      2. The word today is that NEVS does not want Saab Parts. It sounds like they do not want to deal with anything but the new cars that would be built. That is what has the NDO upset.

        1. Sounds that way, Mark. My info is that NEVS had it pretty much sewn late last week. That the NDO could throw in a last minute curve ball the admins didn’t already know about in their dealings with NEVS is indicative of the competencies of both parties (which I don’t rate too high, obviously).

          1. And the NDO throwing in a last minute curve ball….who would ever think THAT could happen?

  2. Like it or not, it seems the Chinese are back, albeit under a name other than Youngman. They are unstoppable.

    It’s sad to see the Indians crashing out of the race for Saab. May be the administrators see through their hot air.

    1. Am not sure…. are you implying there was some anti-Chinese sentiment here?

      The reason I didn’t favour Youngman had nothing to do with the fact they were Chinese. It was because they were idiots.

      The reason I did favour Mahindra was because they’ve got a solid resource base as well as experience in the car industry (both of which are important). You might want to elaborate on your “hot air” claim as Mahindra have been very quiet about their bid. If you’ve got info about it, please share.

      I’m more than happy to give NEVS a chance if it means a continued existence for Saab in Trollhattan. I just hope they’ve got the resources to sustain it and the right pieces in place to execute.

        1. I guess that will test what the administrators are looking for. Youngman should not be considered further. The fact that they’ve now got some money in a European bank just highlights that they didn’t know quick access to cash would be needed. To paraphrase Rumsfeld, they don’t know what they don’t know, which is why I’ll never be a fan of their stewardship should it go that way.

          1. I agree Steven.

            YM, have been in this game longer than all others, so the money should be there by now!!..

  3. Flattail, Saab Parts AB is a completely different entity. Electric cars are the future. I got passed on my way to work last year by a Nissan Leaf. I have rented one and driven it home. In Portland Oregon we are way ahead of the curve. Look at all the money Daimler has put into the Cars To Go program here.

    First asbestos free brake pads, check. First EJECTION seat in an airplane, check. Fuel injection, Direct Ignition,and turbocharging in 1984, check. Drive by wire, FIRST, check. Us car dorks were always into Saab for the technology, now is the time to drool over the future.

    This is the most fitting chance our buddies in sweden have at being relevant. In the future. Wish them the best, and lets all support what is coming from Trollhattan!

    I wont be able to sleep tonight, this is exciting stuff!

    1. Don’t know what you are smoking out there on the west coast, but electric cars and middle America mix like oil and water.

  4. Lets keep our fingers crossed that good their business strategy is a viable one. One to ponder, reflect and go “Oooh that’s good!” instead of “Naaaah”.

    Cheers/Tom

  5. Yes, Mahindra has been very quiet about their bid. They are so quiet that according to http://www.lifewithsaab.com/ , they didn’t even confirm whether they had placed a bid at all.

    IMHO it’s rather spectacular for such a conglomerate to lose out to this relatively unknown NEVS. I don’t have the proof to substantiate my “hot air” claim but it is a reasonable inference from this latest development that their bid is grossly inadequate, if they have placed one at all, such that even a bid from this obscure NEVS is better than theirs.

    Swade, I see your criticism of Youngman as factually based. At no times did I think it is racially motivated. But if Chinese Youngman’s bid is flawed, there is always the doubt whether this partially Chinese NEVS bid is any better when even less information is available on the Chinese party. Skepticism on bids from China, whether from Youngman or other Chinese companies, is therefore only natural.

  6. If as is rumoured NEVS wants no part of Saab Parts, then Saab AB should withhold the Saab name. Otherwise it’s like denying Saab’s heritage. Let them call their Hybrids/EVs SVEN instead!

    1. I’ve seen the rumours but can’t believe in it. Saab Parts are making serious cash and not wanting that in an org is unheard of.

      But it might be right and it might be the cause of the issue with the NDO. Stupid as heck if it’s true.

      Cheers/Tom

    2. I would interpret this [NEVS wants no part of Saab Parts] as they want nothing to do with yesterday’s Saab…..

  7. If there is a SAAB driving around on the world’s roads with a 2013 build plate on it, I don’t really mind how it actually moves about at this juncture, so long as it is moving. Forward.

  8. On the other hand, we are now several years into the marketing of hybrids and also some electrical cars. Any company with a decent leadership knows where they will be heading. I presume that the forces behind NEVS are no idiots. They will know that it will take several years to create a market for such cars. And this is a chance for Saab. Even if Saab cannot make a profit in the next years, the owners will have (hopefully) anticipated this, and the operation will not collapse, as it happened with underfunded SWAN.

  9. All well and good, but from this side of the pond(s), there is an elephant in the room – a woolly mammoth, actually – and that is support for the owner base. Warranty support for those cars that were sold with it, parts and service support for owners and dealers. My belief (unburdened by any knowledge) is that all of the above are firmly wedged into inaction by SaabUSA’s Chapter 13 filing, with the trustee in bankruptcy firmly denying any expenditures. Will it take a massive infusion of cash to make the creditors whole and discharge the case before even the parts business can operate normally? Is there an attorney representing the owners of cars under warranty among the creditors? Sad to say, but my belief (again without the burden of knowledge of any kind) is that the North American business will be simply written off.

  10. I obviously wish the people of Trollhattan well with this, even though they seem to have a suicidal national government that has seemingly gone through astonishing lengths to mess this entire affair up as much as possible…

    Although I’ve loved Saab for many years and realized my dream almost two years ago of buying a Turbo-X, I must nevertheless repeat what I posted on SU. As a customer who spent about $2,500 on a certified preowned warranty for that Saab in 2010, only to watch it evaporate as I’ve spent now $1500+ on repairs that would otherwise have been covered, I have to say that any “new” Saab, NEVS or otherwise, that isn’t interested in renewing my warranty and isn’t interested in making parts for older Saabs is a Saab I will never buy a car from in the future, no matter how compelling the product or how resurgent the brand. Period.

    1. You cannot blame the manufacturer for the warranty issue. In my country, there is only 1 Saab importer, and they still honor existing warranties and even sell all new Saabs they have left with a 5 year warranty.
      The funny thing is, they just dropped Opel and have no plan to drop Saab at all.

      1. 1) The manufacturer went bankrupt. It is now gone. This is not about blame, it is about resurrecting the brand name under a new manufacturer, and rightly or wrongly a previous owner who has been “stiffed” on one new car will never buy another.

        2) In the USA, we often can’t even buy the necessary parts, let alone have them delivered under the warranty terms. I have guessed at the source of the problem being our own court system, but it is only a guess. In any case, someone whose car has been laid up for months waiting for what should be a commonly available part will never buy another of that brand. I’m just saying…

        3) At least one dealer (Saab of North Olmsted, near Cleveland Ohio) has made the commitment to honor the warranty themselves for any Saab purchased or leased before the bankruptcy. It’s called “taking care of your customers.” It helps that they have a half dozen other premium brand franchises, and are likely to have created “customers for life” with this.

  11. I look forward to hybrid Saabs.
    Hybrid powertrains are a decent solution to the internal combustion engine’s inefficiency at idle and low speeds. That covers most city traffic and suburban commutes.

    (The new) Saab will need to address hybrid technology’s three biggest issues: high cost, high environmental externalities, and poor driving dynamics.

    The electric rear axle solution addresses the first two concerns. It minimizes the size and complexity of the electric powertrain by only using it when it makes sense: at low speeds and during acceleration. This means that the electric motor isn’t sized to power a car at freeway speeds (although the electric axle can be used to supplement traction). Ironically, a smaller electric motor and battery pack means that you can also have a smaller gas/diesel engine. There’s less weight to lug around.

    This should be interesting.

    I wonder how small the Phoenix platform can go. Most of the European urban market is made-up of cars under4 meters, and a surprising part of that market is for “premium” small cars such as the Mini, 500, Smart and Prius. Saab could make a killing with a stylish and practical offering.

  12. Whatever the ugh factor remember that Sweden plans on not allowing petrol engines after around the 2025. Does this mean the end of the Mahindra bid? I am reading conflicting reports?

      1. I’m pretty sure this is only something some one somewhere said because it sounded good at the time and 2025 still is way into the future.

  13. I wish SAAB well…but…this does not portend well for sales in the US anyway:

    http://www.autonews.com/apps/pbcs.dll/article?AID=/20120409/OEM05/120409868/1186/most-hybrid-buyers-dont-buy-another-one-polk-study-says

    Have a friend who I introduced to SAAB many years ago, and he & his wife have owned at least a dozen over the years. They both had been BMW owners for years before. BUT…in 2008 when the price of petrol in the US (and elsewhere) went sky high…he turned in his 2006 9-5 sedan for a Prius. They kept her 9-7x, due to a longer lease. And that 9-7x is their ride of choice whenever we meet them somewhere.

    I have NEVER seen him drive that car, and I know he actually hates it. I am sure that when it is time to get another car…the Prius will be going away.

    He has enjoyed cars that can “perform”…and that Prius simply does not do what he wants. And yes…I do know some electric cars CAN perform, Tesla make some nice ones…and so does Porsche now…but at an extremely high price.

    What is needed is a mid-priced vehicle that can carry 5 adults in safety and comfort, be fun to drive, handle well, and have the ability to stuff a fridge in the back when needed. Sound familiar? 😉

    As I said elsewhere here…I wish nothing but the best for the SAAB workers and their families…but NEVS/SAAB (if that indeed who is the new owner) had better not be pinning their revival SOLELY on a Hybrid, because Hybrids only make up about 10% of total vehicle sales worldwide, and there are already a lot of players in the market. And again…yes…I know hybrid sales are increasing over time…but time is something SAAB doesn’t have to give in another attempt at revival. If it isn’t profitable within 2-3 years at the outside…it will surely be the final gasp, sadly.

    1. Maybe this is what the new Saab will be all about.

      Building a car that is electric/dual fuel, that also drives like a petrol powered car.

      Saab’s problem now is that the e-aam partnership was sold off in the bankruptcy.

    2. The Prius is a nasty car to drive, but it doesn’t have to be that way. The Corolla is just as unpleasant, and it’s not a hybrid.
      I’m sure a new Saab could make a hybrid that doesn’t suck.

  14. Re: rumors about NEVS not being interested in Saab Parts AB.

    A Saab not interested in its heritage is, quite simply, not Saab. Period.

  15. This is such bad news on so many fronts, especially for the North American market. As Goldberger and liari have pointed out, those of us in North America have been really kicked to the curb. Perhaps we have taken the wrath of those in Europe who hate GM, but I want all Europeans to know how badly abused we feel. I have purchased 15 Saabs and one is 2011 9-5. Our dealers are dying here and parts are getting quite expensive and hard to find. I still own six Saabs and can’t find an engine for one that has been sitting idle for three years now. I had to wait four months to get parts for my new 9-5 when it was wrecked last fall and normal repairs should have taken two weeks.

    There was a lot of Saab loyalty here. But if Saab goes electric, look for Saab loyalty in North America to be lost for a long time. Electrics and hybrids just don’t work very well on our wide open spaces where driving for eight or ten hours is commonplace on any trip.

    Going electric would be the US equivalent of no longer making right hand drive for those in the UK or Australia. Our oil companies are way too strong here and have way too much political power to ever allow electric vehicles to take over the market for the next 30 years. So going electric is the equivalent of abandonment.

    Call this loyal Saab owner truly disgusted.

    1. It’s true!…..Saab Parts may have sewn up the tears in it’s fabric in the UK & Europe but the U.S. is still a growing horror story of components on seemingly unending back order! Keys, neutral switches, wiper blades for ’08 & later cars, the list and lines of off the road cars grows daily!
      Even the TRULY dedicated are quickly becoming jaded & disgusted!

      1. Absolutely true in the US.

        I just came from one former Saab dealer this evening (now a beautiful Cadillac shop, but the Saab repair folks are thankfully still there) where I was told someone’s Saab has been there non-operable for well over a month waiting for a fuel pump. Guess what the problem with my Turbo-X is?

        Fuel pump! Thankfully, they pronouced my car still “drivable,” for now, but I was told it could be “months” before a replacement surfaces, but to check in with them in the next week or two to see where I am “on the list.” Oy!

        1. Is the 9-3 Turbo-X not like previous GM-era Saab 9-3? The fuel pump on my 9-3 died last year before the bankruptcy and I had the whole fuel pump assembly replaced, but I found out that this was not the only way to fix it. Normally you can only order the assembly as one unit, but inside the assembly, the actual fuel pump itself is a standard Bosch fuel pump, I believe. There were even videos on Youtube showing how to safely disassemble the existing pump assembly housing and replace the Bosch fuel pump inside, then reinstall the assembly.

          Perhaps your Saab repair folks could investigate that option?

      2. +1 on the parts issues in the US.

        My local SAAB mechanic told me of a customer of his who has/had two 2007 9-3’s, and had to get rid of one, due to not beng able to get repair parts for it. Needed an ABS control module, and a few other things. Replaced it with a Mini.

        He is now in the process of selling/trading the second one, so he can get ANOTHER Mini. Doesn’t want to get burned again. It was offered to me…but turned it down for obvious reasons.

        As I stated earlier here, I am selling my wife’s 2003 9-5 Aero Sedan in three weeks, while I still have someone who is willing to give me good money for it. Sorry to see it go…but don’t want it turning into an expensive veggie planter, when I can’t get a needed repair part.

  16. Interesting news, however, I am totally engrossed in my familiar SAABs. I couldn’t imagine having a different fleet of daily drivers and weekend cruisers. I hope to continue to see many SAABs on the road.

    Great article Swade!!! I totally agree with your expressed feelings on this one.

  17. Davidgmills is correct. This is a death sentence for Saab in the U.S

    There is no market here for electric cars and hybrids are a nitch maket.

  18. My initial reaction to Saab & electric isn’t positive either (I’m in the US). But I happen to be visiting Albany, NY this week. Two things I really notice on the roads.

    1. More Saabs than I’ve ever seen anywhere (except on a biz trip to Stockholm). I live in North Carolina, where seeing another Saab is something you notice. Here, they are everywhere. I’ll see 3 or 4 at a stoplight. The local Saab dealer (New Salem Saab) seems to have sold a lot of Saabs in the last 20 years.

    2. More Prius than I’ve seen anywhere. Tons of ’em.

    Saab’s significant success in the USA was really limited to a handful of key markets. I’ll bet dinner that those same markets have much larger sales of hybrids than most places.

    1. Have to agree with my fellow North Carolinian. Drive to New England (New York, Connecticut, etc) once or twice a year to visit in-laws, and my Saab feels quite at home there. Enjoy the exotic feel of my Saab in the south, but a hybrid will do quite well in Saab’s usual haunts in North America. A hybrid *can* handle the wide open spaces around the U.S. without an issue —and it is why IF my Saab must be replaced with another brand, I am strongly considering Ford’s upcoming Fusion plug-in hybrid. What would be better? A Saab plug-in hybrid, of course. On-the-other-hand, a “pure electric”? Can’t see that working for anyone except a metro commuter.

    1. Glad you did. I’ve been meaning to post it here, too. Just need to do it.

      About to start one on Koenigsegg.

  19. Tired of all the waiting and frustration.

    I want grainy spypics in AMS, dreaming, drooling over new cars, have happy get togethers with talks of “the new exiting vehicle” or “the new cool facelift and rearaxle” etc etc.
    I want a new and Functioning Saab and No More Recievers, Government, GM and Di.se cheapshots.

    Cheers/Tom

    1. Exactly. To the point!

      I’m tired of this waiting.
      And I’m tired of the hecklers in AMS, NyTeknik, TTELA and others.

      I want what Tompa wants.

      Cheers / Hans H

  20. That’s an old picture of John Travolta. And, oil – gas prices have gone down again this week. (smile)

  21. This year is the 50th anniversary of disastrous 1962 Sino-Indian War in which the Chinese routed the Indians across the two countries’ shared Himalayan border.

    India’s Mahindra must defeat the Chinese backed NEVS this time in the race for Saab, or it will be a humiliation for them. Again, 50 years on.

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