Think halts electric car production, plans layoffs

Another electric car maker has announced layoffs after trouble securing financing.

Oslo, Norway's electric car maker Think Global said it has halted production, with plans to lay off more than half its 250 employees if a funding source isn't secured by mid-January.

The company hopes to resume production in the first quarter of 2009 on the Think City vehicle, which is already for sale in Oslo.

CEO Richard Canny said this week that, to continue operations, Think needs as much as 280 million kroner ($40 million) from the government in the form of loan guarantees, credit or capital in exchange for a stake in the company. Norwegian government officials said they have no plans to offer state aid.

The global credit crunch has made it difficult for Think to secure financing. Additionally, parts suppliers are demanding upfront payments, the company said.

In a release, the company said it had "limited possibilities for funding working capital through bank credits without extra guarantees in today's financial markets."

Think, previously owned by Ford Motor (NYSE: F), has gone bankrupt twice.

The Think City has been in production for two months, and the company contracted with  A123Systems and Ener1 (AMEX: HEV) for batteries (see Ener1, Think demonstrate operational battery pack). The car can reach 65 miles per hour and travel up to 110 miles on a charge.

Think planned to expand to the North American and European markets in 2009, doubling production to 10,000 vehicles a year (see Think electric cars coming to North America). The status of those plans is now in question.

In September, Think reportedly tried to raise up to $80 million in a third round of funding to boost production capacity (see Cleantech cash piles up in Israel). Think Global has raised $85 million to date from DFJ Element, Rockport Capital Partners, British Hazel Capital and CG Capital (see China clean coal IPO).

San Carlos, Calif.-based Tesla Motors, one of the industry's most noticeable entrants, struggled to finance its planned $250 million factory in San Jose because of the economic downturn (see Tesla CEO says carmaker is bouncing back). 

As a result, Tesla announced layoffs and a six-month production delay for its electric Model S sedan (see But... doesn't a superhero need arch enemies? and Cleantech deals in garbage, lighting and batteries).