Lack of funding forces NEVS to suspend Saab production for 4 weeks

Article by Christian A., on May 22, 2014

Production at Swedish carmaker Saab has been stopped temporarily due to lack of funds at parent National Electric Vehicle Sweden. NEVS recently disclosed in a statement that it currently has no sufficient cash to pay outstanding debt since its part-owner, Qingbo Investment Co., has not fulfilled its commitment to finance its activities when needed. NEVS is also cutting its workforce.

NEVS spokesman Mikael Ostlund divulged that the company will start idling its Trollhattan plant in Sweden on May 22, 2014. The production stoppage will last for four weeks. Qingbo -- the investment agency of the city of Qingdao, China – acquired a 22-percent stake in NEVS in 2013 and has ordered 200 Saab EVs for the city.

Ostlund clarified that Qingbo has not terminated the agreement and has vowed to complete it. NEVS is staking its revival plans for Saab on an EV version of a decade-old model, targeting China as its primary market.

The EV version of the model is planned to compete against models built by BMW, Volkswagen and Ford. According to NEVS, it was in talks with another carmaker to co-develop a new platform for new models.

The company said that it is also holding discussions with another carmaker over a possible stake acquisition in NEVS. Ostlund remarked that NEVS is seeking “bridge solutions” until June when the results of the talks are expected to be known.

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