NEVS Trollhattan plant remains idle while cash-flow sorted

NEVS' Trollhattan plant remains idle while cash-flow sorted

Scandinavian automotive supplier body, FKG, says the impact of troubled automaker, National Electric Vehicle Sweden (NEVS)'s production halt can be compared to a "coffee break" in terms of any knock-on effect.

Production of the Saab 9-3 at Trollhättan-based NEVS was halted recently following contractual issues with a shareholder, that has seen bills of US$3.45m mount up as some suppliers remain unpaid.

"When it comes to suppliers we are waiting and seeing," FKG managing director, Fredrik Sidahl, told just-auto from Sweden. "The financial loss is far away from substantial.

"They [NEVS] have produced 30 vehicles in a week, which is material more or less produced by suppliers during a coffee break."

NEVS confirmed to just-auto it was in discussion with two Asian OEMs and although declining to name them, its negotiating stance was confirmed by FKG, which also painted a rosier future for the troubled automaker than some are predicting.

"The investor stopped the cash flow - the reason for that is unclear," said Sidahl. "I know they are discussing some other investors - I talk to NEVS - it is two substantial companies.

"It is a better situation than it was two years ago. We are having a new Saab summer - a Saab summer could be positive news as well as negative."

NEVS took over the formerly bankrupt Saab and has strong ambitions to launch an electric version of the 9-3 into China - a market ripe for conversion to battery power says the FKG chief given its immense pollution difficulties.

"First of all, they [China] have decided to have some scrappage of combustion engine propelled vehicles," said Sidahl. "The figure I heard was 6m vehicles need to be scrapped in favour of clean air.

"All these directives from the [Chinese] government are in favour of electric vehicles."

Swedish enforcement authority, Kronofogden, says it has received 30 applications for unpaid bills relating to NEVS totalling US$3.45m, but the FKG managing director, insists this is small beer and largely relates to businesses outside direct manufacturing.

"Who are the companies filing for assistance from Kronofogden?" said Sidahl.

"They are banks and financial institutions. Of course it is automatic they file for help when a company does not pay."