A hitherto unknown Chinese business man who leads a shadowy “consortium” buys the assets of Saab. The media eats it up. Dalong “Kai Johan” Jiang takes the microphone and says what everybody wants to hear: “Electric cars powered by green electricity is the future and electric cars will be built in Trollhättan.” Jiang says there is a huge market for these made-in-Trollhättan EVs, waiting in China.
Nobody dares to say that it does not make sense at all. We say it.
- There is no market for EVs in China, at least not at the moment. Despite grand plans, EVs in China have not morphed beyond experimental projects.
- There is absolutely no market for imported EVs in China. Every carmaker knows that. Only noobs don’t. In China, new energy cars can only benefit from generous government policies if the car is built in China and sold under a Chinese brand, Nissan’s CEO Carlos Ghosn said at this year’s Beijing Auto Show. Ghosn should know what he is talking about. His company makes the all-electric Leaf and will make it in China under the Venucia brand to comply with the Chinese regulations. Without the subsidies, even a made-in-China EV would be way too expensive.
- Instead of benefiting from subsidies, an imported EV would be priced way out of the non-existing market. Customs duty, taxes and import costs can double the price of a car once it goes on sale in China.
- “Saab” has absolutely no brand cachet in China. Most likely, this won’t be a factor. The sale of the assets does not include the brand name, it would have to be licensed from a very reluctant SAAB AB.
- Lastly, an EV must be purpose-built to make halfway sense. The battery pack of the Nissan Leaf for instance weighs 660 lbs. The rest of the vehicle must be built considerably lighter yet stronger.
“We’re struggling to see how this enterprise is going to work,” Ian Fletcher, a senior analyst in London for IHS Global Insight, said to the New York Times. “Do they have some kind of magic bullet?”
It’s a magic bullet that would be aimed at the foot.
The only way this sale make sense is when the tools, production equipment, and most of all the production know-how that sits in the Trollhättan plant gets shipped to China.