Proton to build cars for Detroit Electric

By John Reed in London
Published: March 29 2009 23:20

Malaysia’s Proton is to mass-produce electric cars under licence for Detroit Electric, a privately owned start-up that will supply the technology and sell the vehicles in Europe, China and the US.
Detroit Electric will market the cars under its own brand, launching in Europe and Asia from next February and in the US three to six months later, Albert Lam, its chief executive, said.

The company would initially sell its cars in European countries with strong tax incentives for low-emission vehicles, including Spain, Denmark, the Netherlands, France and the UK, Mr Lam said.
In China it would work with an undisclosed local carmaker to distribute the cars.
Detroit Electric will produce vehicles on Proton’s saloon car and hatchback manufacturing platforms, with styling changes made to distinguish them from the Malaysian company’s existing line-up.
The partnership will see Proton use Detroit Electric’s drive systems in its own cars for sale in south-east Asia.
The plug-in cars will be powered by lithium-ion batteries and – unlike some plug-in cars planned by rival manufacturers – will not include a petrol “range extender” to back up their battery power.
The lower-priced of Detroit Electric’s two vehicles will sell in the US at $23,000 to $25,000 and have a driving range of 180km per charge.
The other car will have a driving range of 320km per electric charge and be priced at $29,000 to $33,000.
“We believe in an affordable, practical, everyday electric car,” Mr Lam said. “It’s not a high-end vehicle we are targeting or a short-range city car.”
The new venture aims to sell 40,000 vehicles globally in its first year and 270,000 by 2012.
The cars will hit the market at a time when established carmakers, including Daimler, Renault/Nissan and Mitsubishi are preparing to launch electric vehicles, and electric car start-ups Tesla Motors and Think are battling financial and technological constraints to build viable businesses.
It is unclear how US consumers will warm to a car with “Detroit” in its brand name when General Motors and Chrysler are struggling to avoid bankruptcy.
Detroit Electric – named after a long-defunct US car brand launched in 1907 – was launched last year with $100m from investors headed by Mr Lam, a former chief executive of Lotus Engineering, an arm of the UK carmaker Proton owns.
The company is talking to “two to three major funding sources” about raising another $100m.
Mr Lam touted the benefits of Detroit Electric’s business model, based on building cars in Proton’s existing facilities, which meant it would not need to invest in infrastructure.
However, he acknowledged that the Detroit brand name “had mixed results” when the company invited prospective US dealers to test-drive its cars last year.
Copyright The Financial Times Limited 2009