Sevcon Announces Electric Vehicle Joint Venture in China
FEB 16 2014 BY MARK KANE
Sevcon, the manufacturer of controllers for electric and hybrid vehicles, announced recently that it entered into a joint-venture agreement with a subsidiary of Chinese Tier 1 automotive supplier Risenbo. Risenbo, based in Hubei Province, China, has the most important thing going for it in China in regards to EVs – the required approval of the government authorities.
The new joint venture Sevcon [Hubei] New Energy Technology Company, Ltd. (50/50 stake) will market and sell existing and future Sevcon products to Tier 1 automotive suppliers in China. This probably translates into huge orders because price of shares jumped high, doubling its value!
Sevcon President and CEO Matt Boyle stated:
“Partnering with Risenbo is a unique strategic opportunity for Sevcon to gain greater access to the world’s largest electric and hybrid vehicle market. China has long been one of our most important growth regions, driven by increasing product demand in our traditional off-road, industrial, construction and mining markets. This joint venture will open the door for Sevcon to help China’s Tier 1 automotive suppliers meet the country’s fast-growing demand for zero emission scooters, motorcycles, automobiles and commercial vehicles, as well as hybrid electric vehicles. Working with Risenbo, a respected supplier to the automotive market in China, will enable us to forge new customer relationships in this crucially important geographic market far more rapidly and efficiently than we could on our own.”
Sevcon is one of the few leading suppliers of motor controllers, which can be put in off-road and on-road vehicles, as well as in fork lifts and aerial work platform applications. For example, you’ll find Sevcon controllers in Renault (Twizy), Zero Motorcycles, Brammo, Mia Electric… wait, wait. Did we said Mia?
Ouch…the little French company, which dreams to be legit EV manufacturer, is in trouble. And, as Sevcon reported:
“In January 2014, a customer of Sevcon SAS, the French subsidiary of the Company, was placed into administration. The receivable from the customer is $555,000 including taxes. The Company is pursuing full payment of the debt. It is not clear at this time if the debt can or will be repaid and its collection is subject to a legal process.”
This must be Mia’s case. Over half a million will eventually eat at Sevcon’s Q4 net profits, which was $488,000 at $9.0 million in revenue.
President and CEO Matt Boyle commented:
“Sevcon’s revenue growth in the first quarter was driven by increased product shipments in the majority of our markets and in all three of the geographic regions we serve. Our sales growth in North America was driven by substantially stronger demand, year-over-year, in our traditional off-road markets, primarily for fork-lift truck and aerial work platform applications. Demand also was significantly higher in Japan and China, primarily for off-road applications as well. Although the European economy still faces challenges, this was our second consecutive quarter of growth in that region, largely driven by increased product demand for 4-wheel EV applications in the on-road market.”
“Looking forward, the underlying demand patterns appear to be strengthening in the majority of our markets worldwide. Our customers are expressing a greater sense of confidence in the future, and our lead times and order visibility are steadily improving. Sevcon’s portfolio of customer relationships and product pipeline are continuing to expand, and our revenues have grown both sequentially and year-over-year for the past two quarters.”