NEVS, KOENIGSEGG TEAM UP TO DEVELOP ELECTRIC CARS
- Published | 04 February 2019
NEVS (National Electric Vehicle Sweden) is making a capital injection of USD 171.68 million to acquire 20% shares in the Swedish sports car manufacturer Koenigsegg with emphasis on electrification which will push the electric vehicle market.
Global: Supercar manufacturer Koenigsegg partner with Chinese-backed NEVS (National Electric Vehicle Sweden). NEVS has invested USD 171.68 million (Rs 1225 crore) in the small supercar manufacturer to co-develop electric cars. The partnership will result in a new all-electric car company which will leverage the production facilities of NEVS in Sweden and China, as well as the technological process of Koenigsegg.
National Electric Vehicle Sweden AB (NEVS), in which China's Evergrande Health recently became the majority investor, said it would take a 65 percent stake in a new joint venture to "develop a product for new and untapped segments."
Koenigsegg will hold the rest, and contribute intellectual property (IP), technology licenses and product design. The deal deepens China's exposure to Swedish automakers, with Geely owning Volvo Cars and the largest investor in truckmaker AB Volvo, and another Chinese investor having created NEVS in 2012 after buying the core assets and IP rights of Saab Automobile following its demise. Evergrande Health's USD 930 million cash infusion into NEVS, announced this month, was seen as a second lifeline, giving it funds to develop costly electric vehicles and access to new auto technologies, where Evergrande is expanding. Koenigsegg, backed by U.S. and Norwegian investors, sought to buy Saab after its 2011 collapse but the deal never materialized. While the luxury brand has built a plug-in hybrid, it has yet to develop a fully electric vehicle.
According to Rishi Mallarh, analyst at BlueWeave Consulting, the move to electrify vehicles has gathered momentum the world over. With the demand for all-electric cars expected to increase in the near future, two Swedish car manufacturers have partnered to cash in on the trend.
Koenigsegg is a relatively small car manufacturer which has been giving the likes of Ferrari, Lamborghini, and Bugatti a run for their money. For about a quarter of a century, the company has made a name for itself making fast supercars and also introducing new technological innovations, including high-performance flexible-fuelled engines, camless engines, a fixed-ratio gearbox, diamond-coated carbon-fiber, ghost light, and electric motors, among others.
NEVS is a Chinese-backed company based out of Sweden. It came into prominence in 2002 when it acquired the defunct iconic car manufacturer Saab from GM. It has even been using decade-old platforms from Saab to make electric-powered cars for various markets. It’s been selling an all-electric conversion of the Saab 9-3 sedan in China since 2015.
Outcome: One has the most talented team of engineers in the world and another which is ready to spend the money to advance electric mobility. NEVS needs Koenigsegg’s technical expertise to develop new electric cars which will stand out from a large number of manufacturers who are already making, or are planning to make, all-electric cars all around the world. NEVS offers economies of scale in manufacturing. It owns the old Saab plant in Trollhättan, Sweden as well as facilities back in China. Koenigsegg may also benefit from the distribution channels NEVS has in China and sell more of its supercars in the world’s largest automotive market.
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