e.GO planning JV with unnamed Chinese company
German electric vehicle startup e.GO Mobile is planning a joint venture with a Chinese company. According to e.GO boss Günther Schuh, a Chinese version of the e.GO Life will be produced there. The contracts have apparently been signed, but not yet implemented.
“We will make a joint venture with a Chinese investor and produce a Chinese version of the e.GO”, Schuh told the German regional newspaper Rheinische Post. “The contract is signed, but we are still waiting for the money to be transferred.” Schuh did not reveal the name of the Chinese company concerned. He also gave no indication of a time frame for the implementation of the joint venture or the start of sales in China.
The road for the innovative electric vehicle maker has been rocky. For customers, all 3,300 pre-orderers of the e.GO Life in the First Edition should have received their cars by the end of 2019. Then in September, it was announced that only 600 vehicles were to be delivered by the end of the year, with the remaining 2,700 to follow “soon”. Now, according to the Rheinische Post, Schuh now revealed that only 526 vehicles have been produced so far.
The delays in the start of production – according to Schuh’s earlier statements, partly because of tougher approval procedures with suppliers – also had financial consequences for the small company. “In 2019, according to preliminary figures, we will have made sales of around 20 million euros and a loss of around 50 million euros,” Schuh says according to the current report. “For 2020, we are planning sales of 130 million euros. The losses will be between 70 and 80 million euros and will not be reduced until 2021.”
In addition, Schuh had repeatedly spoken out in November against increasing the environmental bonus to 6,000 euros for cheaper e-cars. While large corporations could compensate for this through other vehicles, the increased manufacturer’s share of the purchase bonus would place a much greater burden on a pure e-car manufacturer like e.GO Mobile – and possibly poses an existential threat to e.Go and other similarly small and innovative companies.
And one can count on the fact that Schuh knows his stuff. More than just being the CEO of e.GO Mobile, Günther Schuh was one of the founding fathers of electric delivery vehicle success story StreetScooter and holds numerous other positions in the conflation between German industry, research and university structures.
Since October last year, e.GO Mobile had to struggle with fairly major financial difficulties. “Financing via the market” was not possible for the startup at that time, and the company only just escaped bankruptcy because the shareholders injected 100 million euros in additional capital. This money must be repaid by the end of March 2020 – or else shareholders will have the right to exchange their claim for ordinary shares. Schuh later stated that he was in talks with other investors. A cash injection from China and potential further income from a large e-market could be the solution for e.GO Mobile – as long as the money flows.
presseportal.de (in German)