Tanfield to take electric vehicles to US

By David Blackwell
Published: February 6 2009 16:16

Tanfield is setting up a joint venture in order to take its electric vehicles into the US market.
The shares rose 16 per cent to 7.4p on the back of the news. However a trading update warned of a contraction this year compared with 2008.

The company is to establish Smith Electric Vehicles US Corporation in the US, in which it will retain a 49 per cent stake. SEV US will hold a licence to Tanfield’s intellectual property rights, brand, and all existing sales and sales enquiries in North America. Tanfield will receive a £1m advance on future royalties, which will be paid on every vehicle sold.
SEV US is to establish a US manufacturing, sales and marketing structure. it is expected to start production of a limited number of 7.5 and 12 tonne electric powered trucks by the end of the year.
The company said that the US division, which is expected to raise US$10m, would qualify for Federal and regional funding available for electric vehicle production. It will be headed by Bryan Hansel, who “has a track record of bringing new technologies to market in North America”.
Shares in the Aim-quoted company plunged from more than 200p last summer after it warned of production problems for its electric vehicles and a sharp drop in global demand for the industrial “cherry pickers” – or aerial platforms – which comprise most of its sales.
It experienced “much poorer market conditions” in the second half. Yesterday it said it had had “a number of loss-making months before the impact of cost cutting restored us to a break-even position on a monthly basis, before exceptional restructuring costs.” Nevertheless revenues last year grew to £146.5m (£123.3m).
Adverse trading and the unavailability of credit for customers was continuing to hit customers in all divisions. But the company said it remained free of debt, and was “well positioned to continue to ride out this downturn until eventual market recovery.”
Copyright The Financial Times Limited 2009