Following announcements from earlier this week, NEVS yesterday confirmed to have signed a new partnership with TÜBITAK, the Scientific and Technological Research Council of Turkey. This cooperation includes licensing SAAB 9-3 technology and the provision of expertise in several areas. For Turkey this marks an important step on their journey to establish a national car industry while NEVS will be benefiting through the improving economies of scale and will be hiring an additional 100 engineers in Trollhättan.
On Tuesday, Fikri Işık, the Turkish minister of Science, Industry and Technology announced that Turkey is aiming to get their “national car” on the domestic market latest by the year 2020. The development will be based on the SAAB 9-3 and currently three different powertrains are being considered: fully electric, range extended electric and conventional. The car will be based on the MY14 SAAB 9-3 architecture but will be branded as a local Turkish brand and look differently from the existing 9-3. Three prototypes have been built already and are being tested by TÜBITAK in Istanbul.
This news follows the announcement from earlier in the same week Rolls Royce opening a new Manufacturing Technology Centre in Turkey with the help of TÜBITAK, but more importantly it’s in line with the Turkish ambitions to establish their own national car brand. About a year ago, Minister Işık already confirmed in an interview the desire to create a national brand as a part of Turkey’s goal to become one of the 10 most developed countries in the world: “We shall soon be taking concrete steps. Turkey will embrace its own national automobile brand but it shall not include an internal combustion engine. It will be a range-extended electrical vehicle”. And as a side note, Turkey’s interests in SAAB actually go back even further when Brightwell Holdings was one of the bidders in the aftermath of SAAB Automobile’s bankruptcy in 2011.
What’s in it for NEVS?
I don’t want to debate here whether having a national car industry and/or a “national car” is a sound strategy for any country, but given that the Turkish government has clearly set its mind on it and is pursuing the goal quite aggressively, I can see many tangible benefits for Turkey in partnering with existing international players in the automobile industry where they can license proven technology from and get a head-start versus “reinventing the wheel” themselves.
For NEVS the benefits may seem less obvious, also given that the information provided is still relatively high level. First of all, I guess everyone can understand that licensing the rights to the MY14 SAAB 9-3 is generating concrete income. An undisclosed amount, but logically this has to be in the multi-millions.
So great. But why would NEVS want to deliver the expertise for building and operating yet another car factory while the one in Trollhättan is idling? I would say for two reasons. The first one is again simple: this project is generating income. Once more, undisclosed amounts but considering the ambition levels and the time frame, this has to be in the multi-millions as well. The second reason I believe is also simple, yet very different: building a Turkish national car by definition needs to happen in Turkey, not in a foreign country. Having said that, NEVS President Mattias Bergman declared in an interview that during the start-up phase (parts of) the new car will be built in Trollhättan.
So what about new SAABs?
The other elephant in the room is how this new partnership will help NEVS to develop, produce and market their own line-up of SAAB EVs. A very interesting topic (especially if the number of heated threads on the different Internet forums are any indication…), but there actually is a direct connection. I don’t believe however that NEVS has been very effective so far in painting this bigger picture effectively and consistently however. Let me give it a try in my next post. Stay tuned…
Full transcript from NEVS press conference in Trollhättan, 16 October 2015.
Mikael Östlund: “Welcome to today’s press conference. We’ll be holding it in English because of our external viewers. I’d like to introduce our president, Mattias Bergman, who will explain the cooperation with Turkey to develop the Turkish national car and after that we’ll have time for questions.”
Mattias Bergman: “Our company is very much built on a belief that fossil fuels will end, and that we will not be able to wait until fossil fuels end because the environmental impact will be too severe. When you also know that out of the total pollution, one third is coming from the car industry. So we as a car maker have a responsibility. And we believe that we can contribute to a change. But we also know that one company is too small. One country is too small, when taking on this challenge. It means that we need to work with other countries, we need to work with other OEMs in the car industry, and have to work with other companies outside the car industry to be able to actually make a change.
This is the reason why we now for a number of months have been introducing a number of partnerships. So before I go into the big news of today, give you a short recap. The first is that now we have introduced three Chinese partners. Two of them as owners and shareholders of NEVS and one of them as a shareholder in our two joint ventures in China.
One is the city of Tianjin, giving us access to a market, access to a plant; the market where we’re building our second production and second R&D facilities. The second is SRIT, jointly owned by the Chinese government and China Unicom. A partner also giving us access to the government, the regulatory systems and also –as part of China Unicom- access to a lot of software engineers needed for the future connected cars. Then in the joint ventures in China, we have Teamsum, one of the largest IT companies in China, with a large pool of software engineers also able to contribute to the connected cars.
This requires money and we have two financial partners as of today: The Bank of China and the China Development Bank, giving us a base foundation to implement the business plan, on top of the money that our owners have already committed and contributed.
We have also signed a partnership with one of the largest companies in the world, one of the largest OEMs in the car industry, Dongfeng Motors. A partnership that is giving us synergies when we develop products, platforms and architectures. Giving us synergies to share their resources in purchasing and also getting access to sales and distribution. This partnership goes in both directions, both of us add different parts to this joint story.
We are going into the next phase. We are debt-free since over a month ago. Next week we’ll be publishing our interim report, showing that we are a financially stable company set to implement our vision.
So the news of today: in June we signed a partnership with the Turkish government through a Turkish organization called TÜBITAK. This is a stated-owned organization focused on research for the country of Turkey. This partnership has a focus to build the pride of the Turkish nation. The pride of Turkey to have their own national car. As of today, a lot of joint ventures with foreign companies or companies by themselves produce and sell cars in Turkey but there is no Turkish car in the market. And Turkey, in the position where they are, as a link between Europe and Africa and the Middle East, having a car industry is seen as an important vehicle to develop the nation. They have been looking for a partnership for quite long, they have been evaluating different OEMs and different partners that can implement their vision. We have been in discussions with them for quite a long time but on the 28th of May, actually the start of June, we reached an agreement. On the picture behind me you can see the President of TÜBITAK and the Turkish Minister of Industry.
This cooperation covers a number of areas. One area is the IP. The Intellectual Property in this context is the architecture the SAAB 9-3 is built on. But this architecture is not going to look the same, it’s not going to be the same components. But it is this architecture that together with TÜBITAK and our engineering team will be developed into the “national car”.
So our engineering team here in Trollhättan will work very closely with the engineering team of TÜBITAK and other Turkish partners. We have already built a number of demonstration cars, and the Turkish minister revealed them yesterday. These are cars with different powertrains and different body styles that are now being used outside Istanbul to demonstrate the project for partners in Turkey and building the foundation that they now will be moving on from.
We will also support them in starting up the production. It is a greenfield investment, where our knowledge of running a car factory but also to build the foundation to selling and developing cars. So we are transferring knowledge. We will train Turkish factory builders. Train their purchasing teams, train their engineers and work hand-in-hand with us.
For NEVS this is an important part of implementing our vision. This means also for us, we will be able to cooperate on purchasing as one thing. We’ll be able to share components and share systems. We will also be able to share resources for product development as we will have the same base we’re developing from, even though there will be completely different product names and actually different products from a customer’s perspective. Yet, many systems and components will be the same, giving benefits for us.
The cooperation with TÜBITAK, with over 8,000 engineers and PhD’s and their laboratories we can also add a lot of knowledge we’re not having here. We can also utilize our own resources much better.
So by that, it’s an important part for us that another nation, not only the Swedish government, the Chinese government, but now also the Turkish government are standing up and share the vision to shape mobility solutions for a more sustainable future. So this is an important step. Thank you.
Finally, I also want to introduce Frank Smit to you. He will be the person in charge for the project as a Commercial Project Leader.
We can now take questions. Thank you very much.”
The video recording of the press conference:
“NEVS has been chosen by TÜBITAK as its partner for developing a Turkish National Car
TÜBITAK, (the Scientific and Technological Research Council of Turkey) which has been assigned to develop “Turkish National Car” and realize this important mission, has chosen National Electric Vehicle Sweden AB, Nevs, as the industrial partner for the project.
The cooperation has started in June 2015 between Nevs and TÜBITAK and future industrial synergies in terms of development and manufacturing shall be generated with this cooperation. In the short term perspective this cooperation shall put Nevs’ assets to work and shall give Turkey quick access to extensive automotive knowledge and experience.
Nevs shall also provide its know-how in the developing of the business plan and establishing of the supply and distribution chains to TÜBITAK.
Together with the new shareholders Tianjin and SRIT, the partner Teamsun as well as the cooperation with Dongfeng Motor, the cooperation with TÜBITAK is an important step in building up Nevs as a strong automotive company with industrial, technological and financial partnerships.
“I am very proud to have this strategic cooperation in place. Turkey will be a long-term partner and we will both gain a lot from this cooperation. With Turkey’s focus on electric vehicles we also see this as an important step towards our vision of shaping mobility for a more sustainable future”, said Mattias Bergman, President of Nevs.
Facts about TÜBITAK
The Scientific and Technological Research Council of Turkey, TÜBITAK, is the leading agency for management, funding and conduct of research in Turkey. TÜBITAK was established in 1963 with a mission to advance science and technology, conduct research and support Turkish researchers.
TÜBITAK is an autonomous institution and is governed by a scientific board whose members are selected from prominent scholars from universities, industry and research institutions. TÜBITAK is responsible for promoting, developing, organizing, conducting and coordinating research and development in line with national targets and priorities. Further, TÜBITAK is one of the key institutions involved in the Turkish national car project.