Norway electric carmaker Think starts U.S. production

SAN FRANCISCO (Reuters) - Norwegian electric carmaker Think has started production of its City urban runabout car at an assembly plant in Elkhart, Indiana.

The company, which began selling the latest model of its plastic-bodied two-seater in Europe in late 2008, delivered its first car assembled in the United States to the Indiana Department of Natural Resources last week, according to Barry Engle, Think’s chief executive.

“We’re open for business in the U.S.,” Engle told Reuters.

Until full production begins in 2011, Think is shipping car bodies from Valmet Automotive’s manufacturing plant in Finland for final assembly in Elkhart.

The Indiana workers are installing electric drive trains and lithium-ion batteries made by Ener1 Inc HEV.O, Think's largest shareholder.

Engle said Think expects to assemble 300 City cars in Elkhart by the end of the year and 2,000 to 2,500 cars in 2011. The City is designed to have a range of 100 miles when its battery is fully charged.

Think was one of the first companies to bring a battery-powered car to market, but it has since been eclipsed by the rush by major automakers to offer full-sized electric and electric hybrid vehicles.

Nissan Motor Co 7201.T delivered its first Leaf all-electric car to a customer in California over the weekend, while General Motors Co GM.N has begun to ship its Chevrolet Volt plug-in hybrid in the past week from a Detroit-area factory.

Think has not set a retail price for the City in the United States, but executives previously said they expect to sell the car for around $30,000 before state and federal incentives. In contrast the Leaf retails for $32,780 while the Volt is priced at $41,000.

Think, which has changed owners and struggled for cash through the years, announced in May that it had raised $40 million from existing shareholders to fund operations.

Engle, a former Ford Motor Co F.N executive, said Think will not try to compete with the big carmakers but will focus on selling the Think to corporate fleets and consumers in urban markets.

“The initial sales in the U.S. will all be fleets,” Engle said. “About 80 percent of our business in Europe is fleets.”

He said Think aims to open retail showrooms by mid-2011.

Earlier this week, Think announced that the California Air Resources Board had certified the City as a zero-emission vehicle, clearing the way for the car to be sold in California, Washington, D.C., and 12 states that have adopted California’s emissions standards.

The U.S. production of the City is something of a homecoming for Think. In the late 1990s, Think, then owned by Ford, leased an earlier version of the City in the San Francisco Bay Area as part of a pilot project the let drivers charge their cars at train stations.

The Indiana Department of Natural Resources will use its fleet of 15 City cars in the state’s park system.

Reporting by Todd Woody; Editing by Tim Dobbyn