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Company News

UPDATE 1-Zenn to stop producing low-speed electric cars

* 2010 model will be last

* Production to cease by end-April 2010

* Company to focus on commercializing electric drivetrains

(Adds details, comment from company)

VANCOUVER, British Columbia , Dec 7 (Reuters) - Zenn Motor Co Inc ZNN.V said on Monday it will stop producing its low-speed, low-range electric vehicle in spring 2010 to focus exclusively on commercializing drivetrains for what it sees as the vehicle of the future.

Shares of Zenn jumped as much as 14 percent as the company took another step in changing its strategy from developing and marketing its own electric car to supplying other automakers with components that generate and deliver power in electric vehicles.

“We are absolutely 100 percent focused on electric drivetrain technology,” Zenn spokeswoman Catherine Scrimgeour said.

The small Toronto-based company said its 2010 model will be its last and that it will cease production at its Quebec-based facility by April 30.

In the three years since its launch, Zenn has sold about 500 of the tiny, two-door sedans, mostly to customers in the United States.

Monday’s announcement comes two months after the company announced it had abandoned plans to develop a highway-capable electric car.

Zenn thinks it has a better crack at mass markets by supplying its drivetrains to other automakers. To this end it is banking on potentially breakthrough technology from EEStor Inc, a low-profile, privately held U.S. battery-maker.

It hopes EEStor’s electric storage units will make electric cars faster, more powerful and able to travel longer between charges.

Zenn said it will continue to support servicing and parts needs of owners of its low-speed vehicles in coming years.

By late morning, Zenn’s shares were off their highs but still up 21 Canadian cents, or 5 percent, at C$4.51 on the TSX Venture Exchange.

Reporting by Nicole Mordant; Editing by Frank McGurty

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