FOREWORD – I wrote this post around a week ago. I’ve asked questions about NEVS on-site before and I’ve posed those questions to two officers from NEVS on two separate occasions via email. The second time was just last week, after drafting this. I was hoping to get some input from them that could inform what I wrote here, but to no avail.
I still believe that these are fundamental questions that NEVS need to address if they want conscientious people to follow what they’re doing with Saab with a sense of realism. I’m sure they’ve got answers. I just wish they’d come out and give those answers. SW
Saabs United hosted a gathering in Trollhattan a few weekends ago and one of the presenters at the evening session was a guy from NEVS named Mattias Bergman. He gave a 30-minute presentation on what NEVS has been doing and then took questions for another 30 minutes. You can watch the full video here.
I’ve already raised two key questions for NEVS, neither of which have been answered yet. When Tim from SU did an interview with NEVS I raised those questions again because they still hadn’t been answered. I took some flack for it, too.
Comparing Tim’s interview with Mattias’ presentation, it looks as if those present in Trollhattan were basically treated to the same content. We will only talk about what we’ve done, not the specifics of what we plan to do, etc.
I understand and respect a company’s right to select the information they want to put in the public domain. It’s their choice. But I still maintain that if you’re asking people to attach themselves to your brand (and NEVS have stated publicly that former Saab customers and the Saab brand/history are very important to them), there is a responsibility placed on you to provide a firm basis for that support. That obligation is only multiplied if you’re producing something completely brand new with no history to hang your hat on.
So……. my two questions once again. Let’s take the second question first.
Why would NEVS spend any money bringing out an electric car based on the Saab 9-3? Why not just develop the Phoenix platform they’ve bought the rights to?
I’m going to leave this one alone for the moment. It still doesn’t make sense to me. A lot of money wasted on redeveloping a very old platform when that money could be spent speeding up the development of a new platform and bringing it to market sooner. It seems to be an inefficient use of capital, but it’s a secondary issue and it’s a choice for them as to how they allocate their resources.
The following, however, is a more fundamental question that goes to the core of their business plan….
Why would NEVS consider developing and building their vehicles in Sweden in order to sell them in China? Given the difference in labor costs and the tariffs on vehicles brought into China, it makes no economic sense. Is that really their plan?
Mattias confirmed that NEVS are looking to sell around 80% of their volume in China when they release their first vehicle, internally referred to as the EV1. This is the vehicle that will be based on the 2012 Saab 9-3 but with a substantial facelift to both the interior and exterior.
NEVS will also develop a group of vehicles based on Saab’s Phoenix architecture (EV-2 series). If they do not use Jason Castriota’s existing designs for this Phoenix based vehicle – and indications to me at this point say that they won’t – it’s going to take significantly more time and money to produce this vehicle than what it would have if they had picked up Jason’s designs. Again, that’s their choice but it does add to the cost of vehicle development and the time it will take to get it done.
The EV-1 will use batteries being made at a new factory in China, a plant that went operational in Beijing just recently. This factory will make batteries based on Lithium Iron Phosphate (LiFePO4) technology, a battery type with significant recent developments in the lab, in terms of capacity and charge time. Hopefully they’ve found a way to turn those lab results into real-life advancements.
Koenigsegg recently introduced Lithium Iron technology for their standard battery on the Agera, employing smart battery management technology that would ensure the battery never completely drains and will always preserve enough energy to start the car. That has nothing to do with running an EV, of course, but it’s interesting and shows that NEVS are employing very forward-looking technology. Kudos for that.
A point of concern with regards to the batteries, however, is the suggestion floating around that NEVS might make Saab’s vehicle bodies/interiors in Sweden and then fit the battery (at least, maybe the whole drivetrain) in China.
I can understand the basic logic in this thinking – avoid shipping a battery to Sweden only to bring it back into China and minimise the potential for import taxes on components already made in China. On the surface, it makes sense. I once asked the same question about Saabs that were shipped complete from Sweden to Australia with Australian-made V6’s under the hood. Why not just fit the engine in Australia?
Here’s a 4-minute video showing you the basic answer to that question. You don’t have to watch the whole four minutes to get the gist of it, but it’s interesting viewing if you do.
If you’re going to be a mass-producer of vehicles, as NEVS wishes to be, then this is the accepted way of moving those vehicles to market, en masse, in an efficient manner.
Hopefully you noticed that the cars are being driven on to the ship, which is hard to do when the main source of energy for the vehicle – the battery pack – is thousands of kilometers away.
Of course, NEVS might have plans for a new, innovative way of loading and unloading thousands of vehicles at a time. They might have enough money to build or modify their own ships to do this. I don’t know, but the basic proposition of building vehicles and Sweden and fitting the powertrain in China just doesn’t make sense in 2012 business terms.
And that’s the whole problem of this proposition: It simply doesn’t make economic sense to build vehicles in Sweden to sell them in China based on current knowledge.
Why this matters
I don’t want to know the specifics of NEVS’s vehicles, the interior features, colors, the performance figures. That’s all stuff that NEVS/Saab should indeed keep to themselves until launch. I like what Mattias had to say about the potential for swappable battery packs and I believe the EV industry is heading towards a tipping point that will make them more feasible for a sustainable portion of the market. I think NEVS is positioning Saab into a genuine market of the future. How they’re going to pull it off is still a mystery, however.
What I want to know, what I think any Saab fan interested in NEVS’s work should know, what industry analysts would love to find out, I’m sure, is encapsulated in the question I posted above – How is a business plan (what little we know of it) going to work when it defies so much common logic? How can you sustainably manufacture in Sweden and sell at a reasonable price, as an import, in China?
I really, REALLY want to have faith in NEVS and what they will do with the Saab brand. I have a substantial chunk of my own personal history tied up in Trollhattan. I desperately want to see Saab do well, to see the region get back on its feet. I’ve also got a lot of friends in the Saab community and many of them are quite interested in what NEVS are doing, even if an EV isn’t (yet) in their personal plans for the near future.
My concern is that there are a lot of people I care about pinning their hopes on what NEVS are doing with the Saab name and yet there are still too many basic, fundamental and very reasonable unanswered questions. I still think NEVS should answer those questions if they want/expect people to maintain a serious interest in their future product.