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Ford Pulling Plug on Think Electric Car

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By Michael Ellis

DETROIT (Reuters) - Ford Motor Co. on Friday said it was pulling the plug on its Think electric vehicle division due to poor customer demand and lack of government support for the environmentally friendly cars.

Ford paid $23 million in 1999 for the Norway-based electric vehicle company Pivco Industries, renaming it Think or TH!NK, and has since invested $100 million in the technology as a cure to environmental regulations on fuel economy and emissions.

"The bottom line is we don't believe that this is the future of environmental transport for the mass market," Holmes said.

When Think started production of the Think City electric car in Norway nearly three years ago, officials said they hoped to make 5,000 a year. But production since then has only totaled a little below 1,050 cars. "Clearly that's a disappointing number for us," Holmes said.

Ford will try to sell Think, or work with the Norwegian government to transform the company to create a viable business, Holmes said. Ford hopes to make a decision by the end of September on the future of Think, which has two facilities outside Oslo and employs about 150 people.

The Think City, a two-seater, plastic-bodied hatchback sold in Europe, has a range of about 53 miles in city driving and requires up to six hours for a recharge.

Ford began producing the Think Neighbor, a golfcart-like vehicle with a top speed of about 25 miles per hour, at a Detroit plant in the fall last year. Ford said the plant could produce up to 10,000 vehicles annually, but only 1,688 have been sold so far this year. Ford will end production of the Neighbor at the end of this year, spokeswoman Sara Tatchio said.

Ford shares were up 21 cent, or 1.8 percent, at $11.84 in midday trade on the New York Stock Exchange. The world's second-largest automaker is in the midst of a turnaround plan after a $5.45 billion loss last year that includes plant closings to cut costs.

Other automakers have also backed away from pure electric vehicles. General Motors Corp., the world's largest automaker, spent over $1 billion to develop the GM EV1 electric vehicle in the 1990s. But the EV1 also suffered from a limited range of less than 100 miles before it needed hours of recharging time, and GM stopped building the EV1 a few years ago.

"Battery electric vehicles are not there yet technologically," said Jim Kliesch, a research associate with the nonprofit American Council for an Energy-Efficient Economy and co-author of "The Environmental Guide to Cars and Trucks."

Electric vehicles cost thousands of dollars more than similarly sized cars because of the expensive batteries, which need replacing after a few years, he said. "Nobody has found a way to build a battery that is cheap, can quickly recharge and allows you to drive long distances," Kliesch added.

Government regulations pushing for so-called zero-emission vehicles such as electric cars, which emit no smog-producing exhaust, have also been pushed back.

California's regulations forcing automakers to offer up to 100,000 electric cars and other low-pollution vehicles on the road each year were scheduled to go into effect with the 2003 model year.

But GM won a court injunction delaying that order, and automotive executives expect that the state will rewrite its regulations to allow for more vehicles that emit a low amount of exhaust, such as hybrid vehicles that pair batteries with gasoline engines.

Hybrid cars, such as Toyota Motor Corp.'s Prius and Honda Motor Co.'s Insight, have sold well since they arrived on the market a few years ago.

Ford said it will focus on fuel cell and hybrid gasoline-electric vehicles to meet environmental regulations for cars and trucks. Ford plans to sell its first hybrid, a version of the Ford Escape small sport utility vehicle, next year.
 






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