Think considers Michigan for battery-powered vehicle plant

ANN ARBOR -- With one of its major battery suppliers already in town and planning to expand, the Norwegian maker of the Think electric car confirmed Thursday that Michigan is one of eight states that could land the U.S. plant to build the Think City car.

Attracting Think -- which has sold a total of about 2,000 electric cars in 17 years -- would help jump start the state's efforts to establish Michigan's infrastructure for developing electric cars and other alternative vehicle technologies, experts said.

Think Chief Executive Officer Richard Canny also announced Thursday plans to expand sales of its City car to the U.S. in 2010. Think will launch its expansion with fleet customers and pilot projects next year, then add retail sales in 2011.

Canny said he plans to whittle the site selection for the U.S. plant to one or two states by March 31. By then, Think will have submitted a grant request to the $25 billion Department of Energy program that supports automotive retooling and advanced technology. Canny would not say how much the company is seeking, but said its plans for U.S. expansion depend on the aid.

In December, the parent company in Norway went into "debt settlement," that country's version of Chapter 11 bankruptcy protection, after two months of production of the two-door City. Assembly has stopped and additional private investment is being sought. Canny said he expects the plant in Norway to resume production in May.

The Think City is a two-seater with an optional back seat that is slightly bigger than a Smart. The all-electric City for the European market has a top speed of 62 mph, a range of 112 miles and its batteries need several hours to recharge. Think's goal is to produce a car priced at less than $20,000 with a $90 monthly lease for the batteries.

While Canny would not say which other states are competing for the plant, he confirmed California is on the short list.

California likely would be the car's largest market, but Canny said factors such as state or local incentives also will be considered. He said Think has been met with enthusiasm in all his Michigan meetings.

Michigan has significant engineering talent and a highly skilled work force, which are critical in a decision like this, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

Cole said the state convinced General Motors Corp. to build its battery plant in Michigan, which was not its original choice.

Landing the Think plant would add to infrastructure needed to support projects such as the Chevrolet Volt electric vehicle, said Stephanie Brinley, product analyst with AutoPacific in Troy.

The Think facility envisioned for the U.S. would require about 60,000 square feet in an existing facility, Canny said. It would start producing 16,000 vehicles annually and employ 300. Another 70 employees would be needed at a planned technology center.

Canny said the simplicity of the plastic-bodied cars require a low-cost facility that can break even building 5,000 cars a year.

The second phase, expected to begin in 2012, calls for 60,000 cars a year and would add equipment for painting and welding of the undercarriage and locate more of its supply base in the U.S., Canny said. Employment at the plant could grow to 700, with 150 at the tech center.

Think executives have been in Michigan meeting with officials since Tuesday and used a second-generation City for test drives.

The Michigan Economic Development Commission met with the Think team, a commission spokeswoman confirmed.

Asked why Ann Arbor was chosen to announce U.S. plans, Canny said the area is home to complementary technology.

One of three battery suppliers for the electric Think is A123 Systems, which is planning to build a plant in Michigan.

GM has said it will decide by the end of June where to locate its battery pack plant in Michigan.

The City car would get a new body before its U.S. launch, and the American model would likely achieve 75 mph with greater range on a charge, Canny said.

That means more kilowatts from the batteries under the seats from three suppliers: A123 Systems, EnerDel of Indiana and MES-DEA of Europe.

The electric car company was founded in 1991 in Norway as Pivco Industries. Dearborn-based Ford Motor Co. bought it in 1999, but got out of the business in 2003.