At one end of a previously vacant factory in Elkhart, a northern Indiana manufacturing town, 27 workers quietly have started producing the first American-assembled Think City electric vehicles, while Think prepares the rest of the building for full manufacturing by midyear.
For now, the Elkhart employees of Think North America are working with the shells of plastic-body cars provided by the same Finnish plant that is building the European model. The first 15 cars finished in Elkhart were delivered to the state of Indiana in December, and by the end of this year, the site is expected to turn out 300 cars rated with a 100-mile range.
But even as the company ramps up manufacturing in the U.S., it faces an even bigger hurdle selling its electric cars alongside mainstream offerings from far-larger companies like General Motors Corp. and Nissan Motor Co. Ltd.
The good news is, there's a market, said Think's new CEO, Barry Engle, during a Dec. 15 tour of the Elkhart plant. The bad news is, there's competition.
That wasn't always the case throughout a complex history dating back to the late 1990s. The Oslo, Norway-based company first began with Pivco Industries AS of Aurskog, Norway, to build road-ready electric vehicles.
Ford Motor Co. bought the Think business during an earlier auto industry interest in electric cars, then sold off the holdings when attention turned to other technology. Think then was rescued by investors in Norway and eventually was purchased out of insolvency by a group of investors including New York-based Ener1 Inc., which also owns lithium-ion battery maker EnerDel. EnerDel supplies Think's battery packs from nearby Indianapolis.
Throughout that long history, noted Manufacturing Director Karl Turner, the company has continued to refine its car and the electric drive system. Think has more than 10 years of real-world driving experience under its wheels.
The current car and the plant in Elkhart both represent advances to the vehicle and its production.
From the steel and aluminum structure to the battery units, electric drive system and body panels with pressure formed coextruded acrylic styrene acrylonitrile/ABS, the current Think uses a streamlined production method that relies on a strong supplier network and standardized parts.
Our vehicle is very, very easy to build, Turner said. It's almost a cut and paste. We don't need a vast amount of tooling here.
The Think's molded-in-color body panels, for instance, eliminate any need for a paint shop. The only part painted on the Think is small piece of aluminum, which is handled by the company's supplier.
A paint shop would probably take up most of the shop, he said, pointing to the open space that instead will be dedicated to full production lines.
The workers, recruited mostly from Elkhart, are now doing final assembly on cars in 65,000 square feet of space at one end of the 205,000-square-foot plant that previously housed a supplier for the recreational vehicle industry. Vehicle shells made by Think investor Valmet Automotive Inc. in Uusikaupunki, Finland, come into the plant on pallets, then go to an assembly-line area that is nearly as quiet as a typical office. Turner stresses lean manufacturing systems with a proper place for each tool and piece of equipment.
Once the battery pack is installed at the first station, the cars move on their own power to additional assembly points, which include installation of headlights and tire-pressure monitors covered by U.S. safety regulations. The plant is now finishing 20 cars per day, operating 10 hours a day, seven days a week.
The full manufacturing site will also rely on flexible production systems with an automated magnetic line to move the cars from one point to the other, rather than more-expensive, permanent production lines, Turner said. That flexibility will allow Think to accommodate variety in models as manufacturing increases.
The first pilot vehicle build is targeted for the end of June, with the start of full production by July. Think plans to make 1,500 complete City cars in Elkhart next year, supplementing that by finishing another 1,000 vehicles from Finland, under the same system now in use.
The company plans to find as many local suppliers as it can, Turner said, including a processor for the body panels now produced by a Turkish molder.
Think lists a 100-mile range for its cars putting it in line with Nissan's all-electric Leaf, which went on sale in limited markets at the end of 2010. But the company admits the City could be a quirky sale, with its unconventional look and two seats. Engle maintains, though, that the car is well-suited for its intended audience.
This car was designed specifically for use in heavily congested European cities, he said. It is different from these other cars. For its particular use, really, it's ideal.
But all-electric vehicles will be targeting those same urban areas, pointed out Michael Omotosa with industry analyst JD Power and Associates of Troy, Mich.
Having a choice between the Think, from a company they don't know, and the Leaf, people will go with the better-known brand, said Omotosa, senior manager of the firm's global power-train business.
Think may be able to position itself specifically as the alternative to traditional electric vehicles, he said, but it will not be an easy road toward commercial success.
And there's also the price. The City currently carries a sticker price of $41,000, although there is no retail network yet in the U.S. Its sales so far have been to government and privately owned fleets. The price is the same price as GM's Chevrolet Volt and $8,000 more than the Leaf.
Engle points out that there are government incentives in place that will help lower the eventual consumer cost, while electricity will be far cheaper than gasoline, and fewer moving parts will add up to lower maintenance costs. The Think City, for instance, will not need oil changes.
There's brakes and there's tires, and that's about it, he said.
Groups interested in fleet purchases of the Think City include government agencies, such as Indiana, where the state will use them in park systems, and companies that deliver flowers, pizzas or other small items.
Think will launch its first North American retail sales at two or three key cities by mid-2011, and from there will focus on developing sales in the 20 largest urban markets.