LOS ANGELES -- Electric vehicle manufacturer Think has lost an important investor -- again. Earlier this month, battery maker Ener1 Inc. said it would return its 31 percent stake in the Norwegian company and take a $73.3 million write-down on the investment.
In an earnings call, Ener1 CEO Charles Gassenheimer said that Think "faces the need to recapitalize its go-forward business plan" but that Ener1 had decided not to invest further.
Think's struggle highlights the difficulty that small EV companies face in what for the foreseeable future will be a niche market.
Think declined to comment. But a spokesman for Ener1 said: "We don't think the light-duty [EV] transportation market will ramp up as quickly as the medium-to-heavy duty markets, so we've decided to refocus our efforts in that direction."
In the earnings call, Gassenheimer said the slow growth of the EV market was "primarily due to vehicle costs and slower than expected build-out of charging infrastructure."
Think has lost investors before. Ford Motor Co. pulled out of Think in 2002 after sinking $123 million into it, including initial investment and battery-development costs.
In 2007, Think contracted with Ener1 to supply lithium ion batteries. In 2009, Ener1 invested in Think.
But the market for the Think City, a small electric car with a range of 100 miles or less, a maximum speed of 70 mph and an initial price tag of $41,695 (for the first 100 vehicles; $36,495 after that) hasn't materialized in the United States. Its competitor, the Nissan Leaf, with a similar range and top speed of about 90 mph, sells for $32,780.
Think is looking for new investors. And Europe could be a more receptive market for its EV, says Mike Omotoso, an analyst with J.D. Power and Associates. "More people there live in smaller, more congested cities and take the train for longer trips," he says. "And very high fuel prices make alternatives such as EVs more attractive in Europe, as well."
But Think needs to sell in the United States, too. Even ardent electric-vehicle proponent Paul Scott, vice president of advocacy group pluginamerica.org, figures the Think City EV needs to be priced at no more than $27,000 here.
Scott says: "If they can't build and sell it at the right price point, they are going to fail."