Not A Good Week For Electric Car Companies

Tesla Model S

The BIG question surrounding the fledgling electric car business is whether its big enough to support all the people who want to get into it. For those wondering about the answer, it’s “NO”, just as it was with the internal combustion car business. The only remaining intrigue is about who’ll have a chair when the music stops.

Tesla

For the biggest of the pure EV start-ups it was a case of one step forward and two steps back.

The one step forward was the announcement of a ‘leasing’ plan that would allow more people access to Tesla vehicles without having to stump up their huge prices up-front. That’s good news. Offering what regular car companies can offer is essential if Tesla are going to become a regular car company.

The two steps back?

The first step back is best characterised by Tesla calling their lease plan ‘revolutionary’ and Wired.com calling it ‘bizarre’. Car & Driver went so far as to call the promotion of it Misleading. That’s the chasm between perception and reality at Tesla HQ right now.

Why the contention?

In selling their leasing plan, Tesla put together a calculator intended to show the ‘true cost’ of owning a Tesla under this plan. The problem being that the calculator was loaded with assumptions about how much people’s time is worth, how much time they’ll spend driving long distances and re-charging, and other stuff.

Calculators like these can be a good idea, but the blowback from this one wasn’t great for Tesla. Elon Musk announced the lease plan saying it was possible for the ‘true cost’ of owning a Tesla to be as low as $500 per month (the actual cash cost is at least $1,199 per month). Out of all the people in the motoring press who tried it out that I was able to read, the best of them got their ‘true cost’ down to around $650 per month.

My favourite mocking quote was a tweet from an Automotive News journalist:

“According to Tesla website, if you live in Calif. and make $2 million/year, driving a Model S has an effective monthly cost of minus-$2,000.”

Indeed. The lease/finance plan IS a great idea but Musk has got to learn that doing his own publicity is very much a double-edged sword. He gets it right a lot of the time, but he’s becoming the face of Tesla more than the Model S is, and when you get it wrong, that’s a really dangerous thing.

The second step back for Tesla wasn’t as widely reported, but it was covered here in Australia by one news source, at least. Tesla’s initial quarterly profit has been called into question after Bloomberg News talked with an owner and discovered that Tesla had asked customers to pay for orders up front in order to include them in their profit figure.

According to the email, Tesla was “right on the cusp of profitability this quarter for the first time in 10 years since the company started”.

It then encouraged customers to stump up their payment for the car “in order for Tesla to be able to count your Model S for the quarter”.

Essentially they robbed Q2 to pay Q1, which was a monumentally stupid idea as the market’s only three months away from finding out the real implications of this. Tesla’s share price has been up recently, too, quite possibly on the back of the profit announcement. I’m sure the regulators will be watching market transactions with interest.

Fisker

I don’t think Elon Musk is long any sleep over the stuff mentioned above, but imagine the headache Henrik Fisker must have today. Actually, cancel that. Henrik Fisker left the company that bares his name last month due to disagreements with the board.

So imagine the headache someone must have today after Fisker announced – on a Friday, of course – that it was sacking 75% of its workforce, effective immediately.

Have a nice weekend, folks.

Saab (NEVS)

I got an email from John Flores at New Motor Mag. He had just got off the phone after doing an interview with Mikael Ostlund from NEVS about the situation at Saab. You can read/hear the interview here.

Disclaimer: I haven’t listened to the 30-minute conversation yet.

But assuming they’ve done their job and included the salient points in the summary, then it’s a saddening event.

I conducted an interview with Mikael Ostlund a full five months ago and it seems that absolutely nothing has changed in terms of NEVS’s PR story for Saab. There’s either nothing going on (unlikely) or NEVS has had no change of heart about the way they communicate with potential customers.

It’s a very arrogant approach IMHO and it’s slowly but surely eroding any goodwill that people might have had toward the new Saab.

You may also like

48 Comments

  1. Unfortunately Friday is a common day for layoffs. At least they didn’t do it right before the holiday season. Some companies are so insensitive that they do. Think that’s bad? My wife was laid off when she was pregnant. I remember reading studies were done to determine the best day of the week and time for a company to lay-off employees and it wasn’t on a Friday. It was like a Tuesday or something. I don’t remember the rationale.

    I do live in California though I make significantly less than $2M a year. One thing I can say for Tesla that I can’t for Fisker is that they are definitely moving product. At least locally. I see both the Roadster and Model S every day during my commute, and I know they’re not the same ones as they’re different colors.

    Too bad about Fisker. I thought they make a beautiful car, even if I’d never be able to afford one.

    1. Is seeing a Tesla in LA a bit like seeing a Saab in Trollhattan?

      I really hope they do well, but it’s interesting to live in an age with such saturation coverage of everything and see the ride they’re taking.

  2. Here’s a theory: maybe the biggest problem NEVS has is that people just don’t care. Yes, a handful of Saab enthusiasts and some EV-minded industry observers are having a mild interest, but the general public and the media that serve them: They Just. Don’t. Care. Initially, when NEVS announced their deal, there was a small wave of news stories, but those have now completely died out. Is it lack of confidence in their plans? Is is Saab fatigue? I don’t know, but NEVS seems to be completely off the general media map. Even here in Sweden.

    NEVS have been criticized for not communicating, but I am starting to wonder if we should not turn around the logic: they have no one to communicate to, since no one cares.

    1. You’re right, Jeroen. And the problem with that is your product has to be all the more compelling – not adequate, but absolutely compelling – in order to gain people’s attention again. I hope their tech is up to the job.

      1. Wasn’t NEVS looking into producing 9-3 SAABs again by the summer of 2013? And releasing (as in designed, parts & suppliers contracted for, and production factories up and running) all-electric cars by early 2014?

        “- If so, we could bring forward the production of automobiles by 2013. But our previous business plan with electric cars is definitely there and we plan to release our first electric vehicle early 2014”

        http://saabworld.net/f85/nevs-evaluates-production-saab-9-3-2013-a-27213/

        So how’s that coming along Mikael? Hmmm? Something about “when pigs fly” comes to mind.

  3. There is no product, so what is there to talk about? The history is filled with companies talking about a product that will revolutionize the market in 18 months time – and then either nothing happens, or the product is not the right one for that time and place. That said, I agree that their PR is not working. The few times NEVS said something last year, the statements just created more questions.

    As for no one cares… It is true, but hardly surprising. 2009-2012 were filled with news about things that will/should/could happen regarding Saab Automobile, and it feels that 95% of them didn’t. At some point both the press and the public just get tired of it, and divert their attention to other things that is less talk and more shop. What chance does a company trying to revive the Saab brand have in creating a real interest at a time when they do not have a product or even the ability to produce one? Them communicating to customers now would just seem weird. Forget about people postponing purchases because of their yet-to-be-shown product. And forget about some loyal Saab community that need to be nurtured about things to come. It is so small in real numbers (even in Sweden) that it is of no economic relevance to them when trying to rebuild the company, developing products, and entering markets.

    One could argue that the community is useful for making sure that the brand name is on the radar all the time. But looking at the general attitude from the community towards NEVS, I would say NEVS are better off holding them at arms length. Every time there is a news item in Swedish press about NEVS, then the comments are filled with whining about the desperate need for a +200 bhp ICE with turbo, the need for a hatch, the need for another Viggen, the need for a new take on the original 900, the need for a “real car” instead of an electric toy car… I have no real insight in other brands fan communities out there on the net, but is there another one for a general brand name that seems to be so extremely focused on the past and so constantly negative about all that breaks with the past?

    1. Hear hear!
      I do belive that NEVS is better of without any press right now. They do not need to focus on correcting media, fighting of saabistas that are stuck with turbos (a tech every ice got today, no fuss) or stuck with the old glory days.
      Few Company can survive with just good history.
      I say, let them focus on the stuff to come, let them do there thing on there own. Who know, that might be the best way of connecting ti the saab spirit. By not following what others think is right. That might even be a good thing for the comming product as they might be more differnt?
      In the end, we will tell Nevs what we think when they give us the products to view and test.

    2. “I would say NEVS are better off holding them at arms length. Every time there is a news item in Swedish press about NEVS, then the comments are filled with whining about the desperate need for a +200 bhp ICE with turbo, the need for a hatch, the need for another Viggen, the need for a new take on the original 900, the need for a “real car” instead of an electric toy car…”

      That’s because a premium priced pure Li-Ion city car will fall flat on it’s face in Europe and I think they know it. It would be sooo easy to communicate what is going on over at NEVS, IF they’d know what will be presented is going to excite the existing one million Saabers.
      Heck, they could do a weekly TV reality show about bringing back the brand if they’d wanted to.
      How long is the “evaluation process” about the gas options going to take anyway? Will the announcement come this year, or will it just die out as the first battery operated 9-3’s are driven on to the ships headed to China.

      The every time affirmed announcement ‘no hybrids’ is big worry to me -if they want to be a major player for the next couple of decades in the West.

      1. Yes, it would be easy to communicate, but the reaction is going to be just as yours. “they will fall flat” and then nevs needs to act on each and every reaction to there communication.
        Focus on the products, and don’t listen to much on media, me or anyone trying to make them open up.
        I’ll judge later, when they show what they got. Not now before I know nothing.

        1. Absolutely not, IF they are going to build cars we can and want to buy. People would be behind them 100%.

          With EV’s only, probably better to keep quiet.

      2. “That’s because a premium priced pure Li-Ion city car will fall flat on it’s face in Europe and I think they know it”

        I wonder why that is. Europe is the traditional home of the city car, and the home of the premium car. I would be surprised if there wasn’t a way to combine the two markets. BMW and MB would also be surprised, seeing as they are investing billions in this market.

        Tesla has the right strategy (barring the occasional mishap): start at the high end, build an aspirational product, and very slowly move your way downmarket. Compare that to Nissan selling a $40,000 electric Versa. The difference is that nobody really wants an ultra-expensive dowdy commuter, but lots of people want a tricked-out space-age dream car.

        1. Bernard, because Saab has traditionally been the reliable up market long distance/bad weather cruiser over here. If they now offer a premium priced (55-60k+) battery car I can’t see many going for one.

          Like Eggs said, the economics isn’t there. I’ve never believed in buying something that’s 20 time more expensive ”in order to save money”. Even if electricity would be completely free, depreciation alone of the high priced EV will favor gas cars, especially used ones. The batteries are just too expensive to be competitive unless your in some kind of your own niche category like Tesla.
          If NEVS would go after a Nissan Leaf, maybe they could sell to the city commuting customer, but even the German manufacturers are holding their breath and expect no significant sales numbers for year -or to make any money from them.
          As said before their (VAG, MB, BMW) and the Japanese hybrids will rule a long time to come, ones pure gas cars are more or less banned thanks to emission regulations.

          1. RS,

            I really don’t see the Tesla as a niche car. It’s a 5 meter premium executive car that sells for a similar price to it’s competition: A6/A8, E Class, 5/7 series, Jaguar XJ, Lexus LS. We don’t get the “taxi-spec” versions of these cars in North America, so I’m talking about fully-loaded V8 petrol cars.

            Tesla has been outselling many of the cars in this segment, so they are not a niche player any more. They are effectively a key player in one of the most profitable market segments.

            Tesla also outsold the Leaf, Volt and Plug-In Prius last quarter (individually but not combined). It’s becoming more and more obvious that they picked the right market segment to launch in. The “City Car” segment would have been much more difficult, with lower potential returns.

            I would not be surprised if NEVS decided to go upmarket with their first electric car. They could build a car that everyone wants (even if most can’t afford), rather than one that few could live with because of limited range.

          2. Bernard, unfortunately that’s what I expect to happen. In order to generate any profit from BEV’s they will develop a car that has the SAAB badge but will pretty much be incompatible with the Scandinavia climate or the middle class buyers budget.
            Why not come up with a totally new brand name, just like the Japanese have their ”luxury” models for N.A.

            Look at any video clip from the 70’s or the 80’s and everyones notices that Saab is the Swedish equivalent to VW/AUDI, not Jaguar. I’d swear they wouldn’t even bother with a wagon as their new customer demography in China and the U.S. is not that fond of them.

            Again, lets hope I’m totally wrong and NEVS surprises the **** out of us next year.

          3. RS,

            The alternative is to have nothing at all produced in the former Saab factory. I don’t think that any scenario in which NEVS continues where Spyker left-off is feasible.

            NEVS will need quite a few successful years before they can try to compete in the increasingly small market gap between the VW and Mercedes. As I said before, they stand a better chance if they approach this market from above rather than from below.

          4. But a 50% increase in price will drop probably 80-90 of your potential customers. Can NEVS compete with the Luxury brands right out the gate when the 50k 9-5 was considered too expensive in the U.S. What about 70k for a Chinese owned Saab? Hmmm… Depending on the margins it is better business to sell 10 times more for a small slice than just a few for a 40% gross profit and a huge net loss.
            Saab needs to sell tens of thousands of cars right off the bat. Put a 800.000 SEK starting at tag on an EV in Sweden and sales will be next to nothing.
            Then it’s ALL up to the Chinese customers. How do they feel about NEVS, SAAB 2.0 and luxury BEV’s?

          5. That’s why it’s so fascinating that Tesla is outselling all other plug-in cars in the US. The market for upscale, full-featured plug-ins is larger than it seems.
            My interpretation is that, because they included sufficient battery power, they are competing with the whole luxury car market, not just the non-existent “luxury electric” market.
            I don’t think that NEVS should duplicate Tesla’s strategy word-for-word, but there are definitely lessons to be learned.

  4. The Spyker era was certainly filled with high highs and low lows. The rollercoaster ride was hard to take and when it all fell over the brand had sustained such damage that it is probably the best thing that the ‘name’ recedes from the automotive memory for a bit longer. And when a product (and we all hope there actually IS one) appears then it should all start to make sense.
    If the marketing strategy is about the product then little wonder that we hear and see nothing. Bergman said quite clearly that they do not want to announce things that haven’t been built.
    Which begs the question as to why you would relaunch the 9-3 architecture again….

  5. The way I see it, NEVS bought two good things when they bought Saab – a modern factory with access to good people if they choose to hire them, and a brand with more than its fair share of interest not only from a Saab-centric following, but from a large portion of the motoring press, too.

    Whether or not you agree that they should tell a story, the fact remains that they could – and they do have material to use if they so choose. Personally, I believe it would help them IF they’re seriously interested in cultivating markets outside China and I think it’s a touch of arrogance to say “we’ll talk when it suits us” – which is how their position has been described, mostly at SU.

    What disappointed me most about the interview mentioned today is that from what I can tell, there was absolutely nothing different from five months ago until now. This is the re-start of what is basically a new company (albeit one with a past). There should be stuff happening left, right and center, every week. That they’ve got absolutely nothing to add to the narrative is, for me, a massive concern.

    1. I do under stand this, and I do believe there is happening stuff all over the place (since I do follow the job offerering close). But the strategy of telling us, the press and the ones interested when there is certainty is a philosophy I do like.
      For the information-over-load society we live in, that is the complete opposite to what is expected. And that gives some bad feeling to some, and that alone can be a problem. On the other hand, by going public when there is some true news to tell might just do the trick, if just because they are the only company in the industry doing like this? A statement in it self if you wish.

      I’m not saying that it will work, I’m just saying that it is more pleasant to me. It gives me the impression of a more calm and confident company than a high profile media company. A company running to the press as soon as an new guy or gal is employed, the CEO takes a decision of any kind or if a board member is going to the lo…

    2. …and also. The saab-way has in my mind never been about shouting out load. It has, in my mind, always been a calm and discrete presentation of the cars, and the look of the cars.

  6. There was a great chart I saw somewhere recently that spelled out the point at which electric cars become cost effective with fuel. It required the cost of the batteries to be 1/5th the price they are now, and gasoline to be $5-6 per gallon. It will be a long time before that happens.

    What was surprising was that the chart indicated that the Chevy volt could be cost effective with only a 20% drop in the battery price. That to me indicates that they were on the right track with that design.

    This is all based on a National Research Council study in the US (and assumed little or no subsidies for buying electric cars, which are $19,000 in China).

    Now the good news, or the only thing that will save NEVS. The Chinese government is becoming increasingly panicked by the huge airborne pollution in Chinese cities, and a lot of it comes from cars and trucks (page 2 of the Financial Times today). I suspect that’s going to lead to a bigger push for more electric cars and nuclear power plants, so if NEVS can hold on a few more years before they start shipping product, they actually stand a decent chance.

  7. I’ve been an electric car naysayer from the beginning, and it’s 100% due to the skewed economics. Battery power density isn’t what it should be for practical use in anything other than an ultra lightweight car, and even then you have to use some fairly exotic materials and a moderately complex charging system and motor controller to make the most of that. The technology simply isn’t there yet.

    Footnote: unfortunately, our government is subsidizing electric cars like crazy to make them viable in the short run, in the hopes that the needed infrastructure will develop and thus bring the costs down that way. This is, in my opinion, akin to buying paint for a house that you don’t have a downpayment for.

    1. I’m a 19 year Saab nut. I was quite deep in ICE and built my own major engine components by hand. I understand the technology very very well. I was also an electric car skeptic until I put major time into wrapping my mind around the EV scene and understanding it systemically. There are wildly varying ideas out there as to whether or not EVs are good or bad and if they are ready for the prime-time.

      The result of my research has lead me to the purchase(lease) of a 2013 Ford Focus electric. Obviously I feel it is ready for prime-time. It is not, and no car is, right for everyone. But for those whose circumstances do fit this car, and there are far more than people yet realize, it is a superior alternative to traditional ICE cars.

      I haven’t loved a car this much since my 1989 900 SPG.

      1. I reckon an electric car could cover 90% of my driving needs. I won’t put a percentage on how satisfying that would be from a driver’s point of view mainly because I just don’t know.

        Unfortunately, my best chance of ever getting one here in Australia in the next 5-10 years would be to build my own. Doing that, I’d spend around $20K for an electric Corolla (or similar) using a 20-year old donor car.

        1. Driving dynamics? Well going into it I had my doubts to be sure. I had driven a 2010 Prius that to me drove like a pig. The first BEV I drove was the Leaf and I was expecting another Prius type experience. But it actually drove fairly well. A bit soft for my taste mind you but not bad.

          Then I drove the Focus BEV. At first you are a bit overcome by the weirdness of it all. The silence. We have spent our whole life hearing vroom vroom so it is a bit strange to push the go pedal and hear next to nothing.

          I suppose you will have to trust me on this but this car is all about involvement. From two angles. Since it is an eco car and has all these fancy displays showing you how much energy you are using you begin to make everyday driving runs into extreme fun by trying to eek out better and better performance. You have to keep in mind all these variables. When to accelerate and how much. Mental calculations of when the light will turn red, when coasting or regen is the better option. Anyways. More than I can list here. Sufficed to say it keeps you in tune with your car and surrounding environment to a massive degree and I find that a blast.

          One of the things I love about this car is it’s seemingly dual personality. The traditional driver involvement factor, vehicle dynamics, has not been overlooked. The battery in the back of the car makes for a BMW like weight distribution. As in it is very well balanced. This car can carry massive amounts of speed through a corner. In addition, and in a very Saab like manner, this car has explosive mid-range acceleration. What comes to mind in this experience is when an airplane is taking off. That seamless thrust and whirling sound. The FFE feels like that. It is loads of fun. Very Saaby to me. I always loved the way you could press the pedal in low RPMs and get major thrust without the loud blaring engine noises. Just that sweet spooling turbo sound and then a rush of speed. The FFE has that same smooth rush of speed but it is like your brain has a direct connection to the motor. The exact moment you request more acceleration you have it.

          The FFE isn’t all peaches and cream mind you. It is a little sluggish off the line. I think that is some controls put on the power by the engineers. There is also a bit of torque steer to deal with. Not as much road feel as you’d get in a Saab. A few issues with the MyFordTouch system.

          On the whole however this car is phenomenal fun. I now eagerly await what NEVS does.

      2. I understand the technology well enough, I think. Again, the ECONOMICS are the stumbling block. The Ford Focus Electric is a $40,000 car WITH GOVERNMENT SUBSIDIES. The real cost is in the neighborhood of $48,000. $48,000 would buy you a new 2011 9-5 turbo when Saab was still making cars. That’s where my skepticism lies — only a handful of souls would opt for the electric Focus when they can have a much better gasoline-powered car. That hasn’t changed.

        I’m glad that you like the Focus. BTW, yes, the engineers limit the current draw from standstill — this is called a ‘soft’ start. It allows the motor components to be lighter and last longer, and it avoids unnecessary and detrimental battery discharge. The phenomenon they are trying to limit is known as ‘inrush’. Google ‘motor inrush current’ to see the curves, etc.

        1. Hmm. Fairly certain they did it to prevent excessive torque steer.

          Your economic numbers are all wrong. At least as far as it concerns the consumer. The FFE tops out at about $41K. That is before you add in the $7500 federal tax credit. Ford set the $41K price with a normal amount of profit built into it. They have recently reduced the effective price over 10K.

          I don’t recommend purchasing an EV this early in the game. Ford is advertising some cheap lease deals right now. $284 for 36 months $929 down. I’m sure I could have done better if I was a better haggler but mine is $355 for 39 months $400 down. This is now our main car and does the bulk of the driving. Replacing ICE driven miles with EV miles makes the effective price of this car for us in the $215 range. If you think you can beat that with a comparable ICE you got a nother thing coming.

          Our car is loaded with tons of features too. If you are trying to do a direct ICE comparison you’d have to select a fully loaded Titanium version of the Focus.

          I was actually having a hard time not buying a 2010-2011 9-5 instead. Not because of economic reasons but nostalgic ones. It just would have cost way way too much. I also firmly and emphatically believe that electric is the future. It is however early days and I want to do whatever I can to support that so we can get to a mature market quicker.

          No spark plugs
          No O2 sensors
          No muffler
          No oil that needs changing every few months
          No constant stops at the gas station
          No vibration at idle

          The only thing that needs to be done to this car service wise is changing out the battery coolant. At 150,000miles. Seriously.

          In the meantime I have a buttery smooth drivetrain that feels super luxurious. A car that is in lock-step with my mind when it comes to acceleration. Great handling at the limit. Fantastic looks. Tons of luxury and safety features to bask in. And it saves me a bunch of money in the process. Oh yeah. And I’m helping save the world:P

          Only the uninformed would opt for the ICE when they could have the superior BEV. Hopefully that does change;)

          1. I think BEV’s are a good move by Ford. They’ve made 30 billion dollars in pure profit over the last four years and they’re continuing to make money from ICE cars.
            They can basically sell EV’s for a huge loss for a long time just to set up future sales -and test the tech in real life.

            saabluster, I’m sure the new battery will be replaced with the coolant? 😉 (price unknown). I’ve never come across a Li-Ion battery that’s more than three years old and has any juice left…

          2. @RS
            You also most liklely have not come across a device that prevents you from accessing the full charge or that has active temperature control. As I said earlier I did my homework. Ford designed this car really really well. It will not allow the full use of the battery pack. This means that battery life will be far higher since it spends the vast majority of it’s time in the “sweet spot” of between 20-80% capacity. They also get browny points for designing the battery pack properly with pack cooling and heating. This means the battery pack will be good for well over 150,000 miles. Not that it matters much to me as I most likely will be turning this car in for a Tesla Gen III or Saab BEV if it is available.

          3. saabluster, I hope it works out well for you and Ford sure can afford to cover any issues under warranty.
            I agree a reasonably priced BEV makes sense in warm climate, for those with short commutes and constant access to power outlets.

  8. found the new motor interview very tedious, Mikael Ostlund spoke in a very erratic manner lacking any sort of confidence in what he was talking about, “…the Chinese middle class are getting richer looking to buy motor cars…”, that’s a very basic business plan… plus “…i dont think anyone is having problems getting parts for their current 9-3….” wtf

  9. Another really interesting editorial, Swade. I find your view on things informative and entertaining even when I don’t share that view. As a result we can all have some quality debate.

    Regarding NEVS:

    “It’s a very arrogant approach IMHO and it’s slowly but surely eroding any goodwill that people might have had toward the new Saab.”

    I don’t agree with that at all, and therefore must echo the views of several other posters above.

    My goodwill for NEVS is not eroded whatsoever by their quiet approach; quite the opposite, in fact. I like the fact that they are focusing on what needs to be done behind the scenes before announcing their return to the market and launching a big PR drive.

    I think a sense of perspective is required here. Plenty of people – infinitely more than us car geeks who spend our time on motoring forums – are going to be interested in NEVS’s offerings, electric or ICE, provided they deliver a product people will want to buy and market it correctly. Until the product is ready for market, there’s surely not much point in them getting carried away with themselves.

    The Muller era was in hindsight more than a touch “emperor’s new clothes” – and I liked VM’s sartorial style, by the way – but maybe the guys at NEVS are being so ultra quiet and cautious during this initial phase not merely because it’s both a very Swedish and Chinese way to behave, but also precisely because they want to protect and repair the credibility of Saab that was so massively damaged in the quadruple fiasco of GM-Koenigsegg-Spyker-bankruptcy in 2008-2012. The point Andrew Robertson made about the utility of exiting the market for a while to let all that toxic dust settle is a really good one in my view.

    Sure, it could be that NEVS end up being a vast disappointment. But it’s way, way too early to be writing them off. A lot of this, it seems to me, comes down to gut attitudes towards EVs. Personally, I just have a gut feeling that electric cars are a good thing. It is perfectly obvious that these cars were always going to be costly and eccentric to begin with, considering all the various hurdles that must be overcome – but they will be overcome. And I think that is the dividing line for most of us here, if we are being really honest. A lot of people, deep down, don’t see those hurdles being overcome because they just plain don’t trust a car that doesn’t run on petrol (gas). So it will be an awfully long, hard road to convince them otherwise, if at all. I am optimistic that eventually the battle for mass-market EVs will be won and I really hope to see Saab playing a role in that.

    Anyway, like I said, another really nice post Swade. I can’t wait to read your reactions when you eventually drive a NEVS Saab!

    1. “It is perfectly obvious that these cars were always going to be costly and eccentric to begin with”

      Allan, that is the crux of the problem. Even if NEVS sells EV’s successfully in China for 10 years but doesn’t have a gas or hybrid based on Phoenix for the Western markets, those former Saabers have moved on for good by then and the brand name SAAB will have no value or connection to its rich history. Everything needs to be built from scratch and THAT is very very expensive. Even pointless?
      Personally I’d hate to see Saab become just some snob city vehicle for Chinese bureaucrats.
      Maybe a daydream for the Swedish politicians but not me.

  10. Hi Allan and Swade,

    I have been passionate about Saab ever since I can remember. I like my ’08 9-3 SC, but miss my ’01 9-5 SC. I like both your positions, but at this point I am more leaning towards Allan. I remember an episode of Real Time with Bill Maher from several years ago. Although left leaning, Bill’s guest was Kevin Costner. I didn’t know whether he was left or right, so to my surprise he said that during the 2004 election he wished he had the guts to vote independent, or green party, which would have been a lost vote. The discussion that followed brought a good argument, the oil crisis from the ’80s should have started a serious industry about alternative fuel cars. By now we could have had a solid 25 years of development. A large portion of our cars would have been electric or hydro.

    I am almost 39. So By the time I am 49, 59 or 69, what cars will we be driving? I think it comes from two sides. The big companies that can invest in research and smaller ‘fringe’ start up companies that think outside of the box. So perhaps starting with the more expensive sports cars is not a bad thing. I think the nay sayers will be wrong and I think they will be wrong pretty soon. And soon can still be 5 to 10 years from now. I hope NEVS will bring a line-up that is revolutionary. I live in the North East of the US. Drive about 25 miles a day and sometimes need to drive 130, so range is still important to me.

    Back to today. I am not a petrol head. I like good design. My iPad has more power and memory than my 10 year old laptop and it was 5 times cheaper. To me this illustrates how we will move forward. Demand will be created out of necessity. So I have hope and I have time.

    Here’s to NEVS/Saab in whatever state they return.

    Nico

    1. “Personally I’d hate to see Saab become just some snob city vehicle for Chinese bureaucrats.”

      Me too RS. Let’s pray that doesn’t happen.

      Nico – I like what you are thinking. These are exciting times and electric cars can only get better and more affordable.

      But certainly Swade is right to bring to our attention that all is far from rosy in the EV garden at the moment. (Just as it was in the early days of the mass-market internal combustion engine.)

  11. Range and comfort during winter are key issues for me. Saabs are the best cars to drive in winter conditions, period. This winter has been atrocious in Scandinavia, it’s still snowing outside and temperatures at night are freezing. I want to read and hear many stories on how EVs cope in conditions that we’ve had over the last five months. What do the adverse conditions, primarily the low temperatures mean in terms of range and driving comfort?

    I have little faith that the new Saab is able to live up to the brand’s heritage in that respect. I would need a 200 mile range in any conditions and an hour long charing to consider an EV. And I’m talking about 200 miles in -25 degrees Celsius, with cabin heat to the max and reasonable average speed. Because if you are going to build a Saab based EV, then long road trips will have to be doable. Otherwise go for a soap box structure such as the Mitsu MiEV, which I havehad the discomfort of driving in the winter. With a range of maybe 70 km if you let your ass and windows freeze, and a 4 to 8 hour charge, it is not suitable in my neck of the woods.

  12. I have wondered how long it was going to take for Teslas to show up here in North Carolina. This past week I saw a Roadster on Tuesday followed by a Model S on Wednesday. I guess they’ve arrived.

  13. Maybe, maybe, NEVS ran into a serious problem. As everybody will be aware by now, the initial EV hype has vanished. To get positive attention, it will now be neccessary to release a solid product. Unfortunately, such a product is mainly governed by the battery capacity and density, something that is beyond NEVS’ control. So, what to do?

    Maybe, their business plan was crushed by reality. Releasing the same 9-3 might be a good idea for restarting the factory, but it is evident that it will not help them make a profit, just as it did not help Spyker. So, they now essentially might have to hibernate until better batteries will become available.

  14. Hey folks, John from NewMotor here. Thanks for sharing the link Swade, and the follow-up discussion has been really interesting. I totally understand the frustration of the Saab faithful over the years. I’ve never owned one myself but have long been an admirer*. It’s funny, after I posted the story on Facebook, someone wrote back, “I thought that Saab went out of business?” That supports the notion that Saab has more or less fallen off the radar of all but the most ardent fans and gearheads, which I suppose is both good and bad. In any case, it seems like NEVS sees the market opportunity primarily in China and their strategic relationship with the city of Qingdao is a smart move as they’ll sell a bunch right off the bat to them. I suspect that the Chinese aren’t as aware of the beating the brand has taken over the last several years so that won’t be an impediment. Heck, last I heard, Buick was considered a premium brand there and they sell more cars there than in the US.

    One of the reasons that I started NewMotor was because news about electric and alternative fuel vehicles is often tucked into the margins of traditional car pubs. I’m planning to get regular updates from Saab and keep everyone apprised, something the larger ICE pubs are less inclined to do.

    FWIW, I interviewed a guy with a Tesla Model S this weekend. Afterwards, we went out for a spin. He hit the go pedal when we got to the main road and the thing just took off. I think there’s an outline of my body in the passenger seat, just like in the cartoons. I also interviewed a motorcycle drag racer (Jeff Disinger) that rode an electric bike powered by two washing machine motors to over 130mph. Alternative fuel vehicles are on their way; there’s no doubt in my mind and in all of the 15 and 20 year forecasts that I’ve seen. ICE’s aren’t going away any time soon though, as mild hybrids and tech like stop-start makes them more and more efficient.

    Anyway, thanks for reading. Hopefully I’ll be able to report on some Saab news soon…john

    *I once test drove a Viggen and got stopped by a cop doing 80 in a 55. That torque and boost is seriously addicting. Luckily, my cousin who works for the State Police talked our way out of it. I also almost pulled the trigger on a 9-3 Turbo X when they were being deeply discounted in 2008 or so. I ended up with a pre-owned Honda S2000 instead, but that says more about my proclivity for two-seater sports cars than anything; that Turbo X wagon was mighty mighty tempting.

    1. John, I’ve always found it interesting how much people driving other brands have followed and secretly admired the Saab heritage. I’m also sure many can’t avoid noticing when a 9-3 or 9-5 storms past them in the blizzard either 😉
      After all it’s like asking if you’ve heard about Porsche or the other Swedish car brand? Of course everyone knows them.
      If the post-GM Saab would come up with a truly competitive product range I honestly believe they could sell A LOT.
      Take any of the (local) Chinese brands. Nobody in the West cares what they have or what pretty much happens to any of them in the near future.

  15. Many people tend to think that batteries will develop just as fast as our computers and electronics do. The thing is: batteries are not electronical components, but chemical. It’s a completely different game and the progress in development is much slower. If energy density is doubled in 15 years, we would be lucky.

    With the battery technology of the coming 10 years it is very hard to produce a full EV that will fill the needs of that part of the market needed to be profitable. After the government subsidies stop, the market will be too small to survive on, also in China.

    In general, I’m quite concerned about companies that bet fully on full electrical.

  16. “Those Saab fans who were hanging out to buy a Saab hybrid should head off to the Toyota/Honda/Whatever showroom now. Alternatively, you can try to look up your Saab hybrid at notgonnahappen.com”

    Can’t wait to read Swade’s reaction to the latest news 😉

    1. Allan, here’s my reaction.

      On the surface, this is good news. It’s sensible and it gives Saab fans, the broader community as well as the support-them-whether-it-makes-sense-or-not crowd, some hope of driving something that’ll suit their lifestyle. It’s still a matter of wait and see when it comes to what the actual powertrain will be.

      What concerns me is this:

      This article is about a phone interview with one of NEVS’s PR people just last week. It contains basically the same information as what my interview with Mikael Ostlund had in it, last year.

      i.e. last week, they weren’t making hybrids. And that quote you pulled from my article was based on Ostlund’s own position – hybrids weren’t on the radar for NEVS at all.

      This week, they are.

      Like I said, it’s a sensible decision and I think it gives Saab much greater hope for a wider market and a better future.

      What concerns me is the message and the way such a decision has been delivered. NEVS’s PR machine needs a major tune-up. This is not the way to run a railroad.

      1. It feels good that the prospect of hybrids could be the bridge – if all goes well – that will bring people together over NEVS and the future.

        On the PR front, however, it could very well be that you’re right Swade. It does seem … unusual, strange even … to sort of leak fairly monumental information out in this way.

        On the other hand, you could look at it like this:

        SU, the site that you created, and which initially gained international stature among industry people and fans because of your reputation, remains THE go-to place for Saab people around the world – fans, dealers, whatever – seeking the latest from the inside track.

        It would appear NEVS know that. NEVS also know that they are not yet ready to launch their big mainstream PR drive. But perhaps they just think it is nice to make Saab fans feel a bit special by being given the inside track when they look at SU.

        After all, it is not unprecedented for firms to behave like this with communication of what they’re up to behind the scenes. Far from it. And in the online communication age the rules are being rewritten all the time, as you know better than anyone.

        What would worry me is if one or both of the following were true:

        1. SU have got the severely wrong end of the stick. That has happened before, albeit to be fair that tended to be during the maelstrom of the Spyker / bankruptcy era when the news sometimes shifted hour by hour and SU were under pressure to give people anything that would suggest light at the end of the tunnel. In this case, though, SU does seem to be reporting on something real and they deserve credit for that.

        2. NEVS are indeed, as you suggest, not on top of the PR game, which in turn creates worries about what other things they are not on top of. But I don’t buy that, not at the moment anyway. I just think they are being nice to Saab fans and figuring, ‘fine let a little news leak out since it will do no harm and indeed will create ripples of excitement’, while they prepare to make their official return to the market.

        Reading between the lines I see another issue at play: wouldn’t it have been a good idea to reinstate InsideSaab?

        The NEVS top brass would do well to read Swadeology regularly, take note of your observations and ability to communicate with people intelligently, be cognizant of the fact that you more than anyone galvanised Saab fans from around the world with SU and then went on to do InsideSaab – a job you were never really given the chance to shine in because SWAN fell apart – and then I would be saying to myself: “We need talent like this to be inside the tent, pi$$ing out…”

        Yours respectfully, a member of the “the support-them-whether-it-makes-sense-or-not crowd” 😉

Leave a Reply

Your email address will not be published. Required fields are marked *