• Jun 23rd 2011 at 11:50AM
  • 36
Think City – Click above for high-res image gallery

On the one hand, the fact that Think needed to file for bankruptcyagain – yesterday was not a big surprise. The company has had a hard time selling its plasticky two-seat commuter car in a world that also includes the cheaper, better-equipped Nissan Leaf. The Think City starts at $36,495 in the U.S. (but a strange combination of incentives meant it was possible for some lucky people to get one for just $17,995 recently), while the Leaf, even if it is a different segment vehicle, starts at $32,780 ($25,280 after federal incentives). On the other hand, the reason for the bankruptcy filing are not at all transparent, so we went out and got as much information as we could about what happened behind the scenes. Turns out, sources were willing to talk, but only off the record, so take what follows as the truth from people who were there (or were close) but who do need to protect themselves. Here's the story:

Some time around December of 2010 or January of 2011, it became pretty clear inside Think that the company was starting to run into financial difficulties. The Norwegian company had excess inventory of around 500 cars that could not be sold, and some were shipped to the U.S. to try and move them here. A four-seat version was introduced (well, reintroduced, since it was first promised in 2008), but only a small handful were ever delivered. There was talk that Russian investor Boris Zingarevich, who is Ener1's largest shareholder thus had the most to lose if Think went under (battery company Ener1 has been Think's supply partner since 2007), would step in – and he did provide some short-term loans – but it was not enough to save Think. Its partners were hurt – Ener1 took a $71 million hit in its Q1 earnings call earlier this year – and at some point this spring, Think City production was halted at Valmet. It seems that Think stopped paying some suppliers earlier this year, too. In May, Ener1 ended its deal with Think. (Continue reading...)

Think's problems extend to its home country of Norway, too, as these electric vehicle sales numbers for January-May of 2011 sent to us show:
  • Mitsubishi iMiev: 532 sales and 62% of the market
  • Think City: 85 sales and 10% of the market
  • Citroen C-Zero: 79 sales and 9% of the market
  • Pure Mobility Buddy: 72 sales and 8% of the market
  • Peugot iOn: 54 sales and 6% of the market
  • Tesla Roadster: 14 sales and 2% of the market
  • Tazzari: 10 sales and 1% of the market
  • Reva 8 sales and 1% of the market
  • Fiat 500 Microvett converion: 2 sales and 0% of the market
As one source told us that, "At the end of the day the Think City did not survive the introduction of the iMiEV triplets. At an identical price of $44,000, the iMiEV had an easy match against the home team supporters who were thirsty for something just a little bit bigger." Everyone we talked to mentioned the too-high price of the Think City, and some were in a position to let those in charge know, but all to no avail.

think city ev sunset
Think City – Click above for high-res image gallery

So, what happens next? At this point, Think has only been in bankruptcy for a few hours and it is far too early to tell. The first step is for the appointed trustee to put Think's assets up for sale. The profits from this sale, if any, will go to the creditors, of which Ener1 is the largest one. Someone could come in and buy up Think and move forward with trying to reduce the cost of the car. This would make Ener1 happy, since it is trying to get the $35 that Think owes it and could maybe even continue to supply batteries to the new owners. Ener1 disclosed the $35 million charge to the SEC yesterday, and of that $35 million, $14 million were receivables for Ener1 that was written down to zero. When you know that the Think's battery pack costs $17,000, you can do the math to find that Think effectively got around 823 battery packs for free. Even then, it could not make money selling the cars.

If someone else tries to come in and pick up the pieces, it will only leave us with many more questions. Is it possible to rethink the Think so that it gets a price tag of around $20,000 – or even $15,000 with a battery lease option – and bring that deal to the U.S. market? Might a new owner actually get a DOE loan to make the car, something Ener1/Think tried but could not accomplish? Is the "window of opportunity" that Think had when it was one of the only companies with an electric car on the market now closed, and that means the shutters will remain closed as well? Would another automaker without a good electric vehicle program want to snap up these assets and get a jumpstart on EV technology? Off the record, we have no idea.


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    • 1 Second Ago
  • 36 Comments
      Gordon Chen
      • 4 Years Ago
      I think it's simply economics. Leaf and Volt have better resources: They're made by companies who have a lot of cash, they got a great marketing team with a great campaign, they have decades of experience designing cars, and they already have existing platforms (versa and cruze) to reduce research costs. nevertheless, it's sad when a company like this fails.
      goodoldgorr
      • 4 Years Ago
      This car was not to par as every bev.
      throwback
      • 4 Years Ago
      A bad business plan coupled with an inferior (to the competition) product equals failure. Their best bet is a Chinese company buying the bones of what's left. Every other major car company has some EV program going, what can Think offer them that they do not already have?
      Dan Frederiksen
      • 4 Years Ago
      it would seem that short of embezzlement the problem is too high production cost for the parts. if indeed the cost of the pack alone is 17k$ then that alone is a fatal mistake. given the need for multiple bailouts despite very high sales price it must have been a very unviable product. I find it a little ugly but women seem to like the neotenous look so had the price matched the product they could probably have sold a good number. I'm guessing there are just too many mistakes in the production for it to reasonably be salvaged. if the roller can be built for 10k$ or less with their current production setup then I suppose it could be fitted with new lower cost power electronics and thundersky lithium batteries and maybe be a viable business. maybe sell it at 22k$ but if the roller without drivetrain is too expensive then I'd guess nothing can reasonably be done.
      Joeviocoe
      • 4 Years Ago
      Polls are inherently biased... ESPECIALLY phone polls. "A survey of 1,000 Americans"... who are willing to take a phone survey! That already tells me that the majority will be older, retired folks who have nothing better to do. And those folk are LESS likely to want to change old habits and try new things. Certainly not a "plug-in vehicle crowd".
      • 4 Years Ago
      umm. too expensive? LOOK AT IT. it's like some weird frogmobile thing.
      imoore
      • 4 Years Ago
      Despite of the current setbacks, I do believe Think is still doable. They just need to make some changes in their plans. I suggest this: 1. Lower the starting price. Jeffrey says $12,000. I agree with that price. 2. Add a hybrid option with a choice of a gas or diesel-powered 3-cylinder engine. 3. Update the design. I still remember an artist's rendition of a more modern redesign from their 2008 media presentation. That should have been in production 2 years ago. 4. Expand the lineup. Whatever happened to the Ox concept? That car would have given the Leaf a run for its money if executed rightly. Now is the time for someone to step up and put the brand on the right track. Fisker? Tesla? Tata? Anyone?
      paulwesterberg
      • 4 Years Ago
      Yes, if it was available 3 years ago or if it could be sold for $15-18k then it would find a place in the market. But a car that costs as much as a leaf, but offers much less in terms of range & fit/finish/style will not get much traction now that the leaf has launched & the focus EV is on deck.
        Spec
        • 4 Years Ago
        @paulwesterberg
        If it sold for $27K such that it was sub $20K after the tax-credit, it may have had a chance. $15K to $18K? That is impossible. If it was that, it would have been $8K to $10K after rebate? . . . everyone would buy one as a commuter vehicle that would PAY FOR ITSELF in gasoline savings over 5 to 7 years or so. But as I said, such a price was impossible.
        Jim McL
        • 4 Years Ago
        @paulwesterberg
        The Think has the same range as the Leaf and much more predictable performance. With the same type of ABS body panels that made the early Saturns so long lasting, scraping a fender is a non event. Scratches are fixed with a heat gun, not paint.
      Jeff Zekas
      • 4 Years Ago
      This is a $12,000 car selling for over $40,000... enuf said
      Nick From Montreal
      • 4 Years Ago
      Wow, great report Sebabstian. To even have a chance at profitability, they would have had to design and assemble their own battery packs -- like GM, Tesla and Nissan. Paying 17K to an outside source leaves no space for profits on a small car. Whoever can make reliable batteries at the lowest cost will have a permanent advantage over the competition. Obvious, I know...
      SealtestDark
      • 4 Years Ago
      I wonder what will happen to the existing cars. If they get sold at firesale prices I might consider one. If they keep trying to get the current price for them I have other priorities.
        Brian P
        • 4 Years Ago
        @SealtestDark
        With a bankruptcy of GM, it was reasonably assured that parts for pre-bankruptcy vehicles would continue to be available (and they are). With a bankruptcy of a small company like this, there is no such assurance and hardly anyone cares. Very strong probability that replacement parts will not be available. In that situation, few people would want such an orphan vehicle. Crack a windshield ... scrape up a fender ... no new replacements are available and the cars are so rare that used parts are essentially unobtainium ... scrap the car!
      Spec
      • 4 Years Ago
      Both. It was too expensive and too late to the US market. Think was too small and did not have the power to reduce part costs with large volume. The existing auto companies can use many of the same parts in their EVs as in the gas cars and thus many parts in there EVs are mass-manufactured.
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