A few months ago on a random internet search for NEVS, I came across a statement in an electric engine company’s annual report about having meetings in China. The company is familar to us at SU, since their engine powered the Saab ePower– UQM.
From their Q3 earnings call:
“We also met with several new companies in China to begin the process of assessing product sets, market potential and business opportunities. We believe that we now had narrowed the list of potential partners to those with the right combination of technical expertise, product introduction capability, market segment penetration and the political savvy to allow us to realize the sales potential for UQM products in China.
Next, the company NEVS, which is a successor to Saab, also announced a long-term partnership with the city of Quingdao. Quingdao plans to initially invest CNY 2 billion or a little over $300 million, obtaining a 22% ownership share of NEVS through a directed share issue. Quingdao also plans to invest in a plant in China with an ultimate capacity of 400,000 units per year. NEVS has stated that it’s looking to restart production on the current IC-based Saabs yet this year, with electric vehicles beginning in 2014. Because of our extensive development activities with Saab prior, and a ready inventory of motors and controllers, we believe we provide one of the quickest paths for NEVS to get EVs into production.”
Which begs the question, will UQM be the preferred EV motor? If so, will it be the same engine from the ePower? If that’s the case, expect it to drive and feel much the same as that car, which produced 181HP (though they have a more powerful engine available).
By no means is this confirmation that UQM has been chosen to power the future electric Saabs, and I honestly don’t have any insight into this myself. But it makes the most sense as NEVS seems to be trying to line up as much of the existing supplier network as possible. In the Q&A part of the earnings call, UQM’s CEO responded to a question about how to ship existing inventory out as quickly as possible:
And then, from the standpoint of the one that we have been talking about that we can mention is, obviously with Saab, is that, that exact system, with a different controller calibration was used with again, a few minor modifications in the Saab vehicle. So as that relationship comes together and we’re able to — as they put their team in place and get to more details, if that were to come to the fore, that would be a fairly quick usage of that exact inventory and then obviously like I said, there’s a few others we’re talking to, but at the same time, we are talking to new people.
More importantly, statements like this in suppliers’ earnings reports underscore that NEVS is in fact in constant contact, engagement, and development with numerous suppliers and are constantly advancing towards producing Saabs again. Don’t mistake the lack of press releases or information about new product fool you, they’re working feverishly behind the scenes to line up these details in order to have a solid product to eventually market. I think UQM’s CEO summed it up best for me himself during his earnings call,
“Again, there’s several [relationships we’re building]– the one we signed, the MOU with, there’s another that we’ve had by an equal amount of time with, it looks very promising, and then there’s new ones that we talked to. So again, it takes time. China’s about relationships. You don’t ever go in to China and just make a deal and you’re done, and it happens in a couple of weeks. It is the Chinese way, and so we’ve been building those relationships. As I mentioned in my comments, we’re now into the details, the specific of what we think target costs are going to be, and volumes are going to be, and specific specifications where we do specific performance curves for their specific vehicles and all those things, and they’re taking those things into their meetings. Again, we’ve been there 1/2 a dozen times in the last year, and it takes time. But I think it’s very promising and again, with the pollution, the government incentives, $15 billion over the next 5 years, it’s going to generate a whole lot of potential for us and that’s why we’re spending so much time there.
So again, it takes time.