If Th!nk Electric Goes Under, What Other Companies Can Get Swamped?

Word is out that Norway’s Th!nk Electric — one of the only functional electric-car companies in the world — is on the ropes.  Th!nk began as an experiment underwritten by Ford, was spun out on its own, got financed, and looked at least potentially viable.  Then of course the stuff has hit the fan recently.  Autobloggreen is reporting now that in spite of bravado, the cars may not ship, and that Th!nk will not get help from the Norwegian government, which is taking a stern view of bailouts in general.  http://www.autobloggreen.com/2008/12/15/thinks-request-for-help-going-unanswered-not-all-orders-guaran/

OK, that’s as may be.  These things happen to young experimental companies — it is why you get a risk discount when you invest, and why you get a risk premium when they do well.  But in the case of Th!nk, since they have been a constituency of one for lithium ion batteries in electric vehicles so far, the ripples of a collapse would come much closer to home, so to speak.  Th!nk has relationships with the two lithium ion batterymakers who dominate the forming US market for li-ion car batteries: A123 (http://www.a123systems.com) and Ener1 (http://www.ener1.com) , or EnerDel (http://www.ener1.com/capabilities/lithium-ion/default.aspx) , which is their brand and divisional moniker for such batteries).   And what is more, although both Ener1 and A123 have other relationships with users of smaller batteries (non-transport) and some other transport-related development contracts, neither one has another real production supply contract with any other car company. 

A123 is one of many IPOs that disappeared into the fog this fall and has shown no signs of being completed.  And Ener1 has been one of the best-performing alt-energy stocks on the US market this year (Amex:HEV), though it was hit hard today, possibly as a sign that the market is not amused by the impending problems at Th!nk.

If both li-ion car battery companies were to hit hard times, that would leave the auto industry with 3 options: (1) the NiMH batteries that Toyota has been using to dominate the HEV industry to date; (2) Li-ion batteries that are being “developed” by in-house teams or JV teams such as the recently announced Daimler alliance with Evonik (http://www.autobloggreen.com/2008/12/14/daimler-to-bring-lithium-batteries-in-house-through-jv-with-evon/); or (3) none of the above.

If the choice falls on “none of the above,” the default winner will likely be the ultracapacitor-plus-lead batteries being developed by companies like the PbC batteries being developed by Axion Power International (http://www.axionpower.com) of New Castle, PA, or competing designs not yet ready for release or manufacturing by Firefly (http://www.fireflyenergy.com), a Caterpillar scion company.


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