Manufacturing News

Koenigsegg teams with Saab successor to go electric

The Chinese-backed company born from the remnants of bankrupt Swedish automaker Saab is investing 150 million euros (1.15 billion yuan) in a venture with Swedish supercar brand Koenigsegg in a move that could lead to development of electric vehicles.

National Electric Vehicle Sweden, in which China's Evergrande Health has become 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, technology licenses and product design.

The deal deepens China's exposure to Swedish automakers, with Geely owning Volvo Cars and being the largest investor in truckmaker Volvo, and another Chinese investor having created NEVS in 2012 after buying the core assets and intellectual property rights of Saab Automobile after its demise.

NEVS, which owns production bases in Trollh?ttan, Sweden; and Tianjin, China; and plans another in Shanghai, has been trying to establish itself as a full-electric automaker, but has yet to produce a vehicle.

Evergrande Health's $930 million cash infusion into NEVS, announced this month, was seen as a second lifeline, giving it funds to develop costly EVs and access to new auto technologies, where Evergrande is expanding.

Evergrande Health is a unit of property developer China Evergrande Group and is a former investor in U.S. EV developer Faraday Future.

The deal announced Tuesday will give NEVS a 20 percent stake in Koenigsegg and could potentially pave the way for it to begin delivering products to the market. Its loose partnership with Didi Chuxing, known as China's Uber, has yet to yield anything concrete.

"Koenigsegg is an enticing company developing advanced cars with unique technology and with a customer base that is one of a kind. ... We have both competencies and facilities to support Koenigsegg on their journey forward," NEVS Chairman Kai Johan Jiang said.

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 full-electric vehicle.

Tesla's sales success in recent years has shown that a market for luxury EVs exists, pushing traditional carmakers including Volkswagen's Audi and Porsche, and Tata Motors' Jaguar to develop such vehicles.

In the ultraluxury sports car category where Koenigsegg operates, however, Ferrari has said it may introduce an electric version after 2022, while Volkswagen's Lamborghini has expressed willingness to explore the area.

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