Stan Wellaway

Focus on Electric Cars as Oil Prices Rise

Check out the Case Studies page at the UK website of Smith Electric Vehicles -- where you'll see about 400 vehicles bought by a dozen fleet customers. These are in everday use. www.smithelectricvehic...

Or go to the website of their recently formed US company at sev-us.com and check out the News Room page for details of major customers lined up to buy the 7.5 ton Smith Newton delivery truck.

For the depot-based delivery fleet (such as every postal delivery service) the distance limitation of battery powered vehicles is not a problem - and this segment of the market is growing. Three UK companies and two US companies are now addressing it.

The car market is lagging behind electric vans and trucks - but these fleets will usefully trigger volume production of batteries, which in turn will help lower the cost of electric cars. It's a one way tide.

Detroit's Been in Trouble Before - Why This Time Is Different

And so it proved to be! Ford confirmed that Tanfield's Smith division would be their chosen partner for the US electric van. A huge endorsement of Smith Electric Vehicles.

Ford Partners to Commercialize Electric Cars

UK-listed Tanfield Group today announced the formation of a new US company called Smith Electric Vehicles US Corporation (SEVUS), the majority of shares in which will be US-owned.

This not only allows them access to US government funding for the development of alternative transport solutions - it also allows Ford to name them as their (US based) partner for the 2010 electric van. I don't know if this is what Ford intend doing, but if so, there are two imminent opportunities to do so. The car show in Chicago next week, and the WorkTruck show early next month.

Ford and Smith are already partners in Europe, where the established Smith Edison and newer Smith Ampere are both dual-badged Ford/Smith.

Detroit's Been in Trouble Before - Why This Time Is Different

Ford duly mentioned the Tanfield Group name during its press conference at the Detroit show on Sunday. And the Tanfield share price duly responded this week. Local newspapers based close to the company's north-east England HQ seem increasingly convinced that something is afoot.

See www.durhamtimes.co.uk/.../

Detroit's Been in Trouble Before - Why This Time Is Different

Regardless of my enthusiasm for electric vehicles, I wouldn't pretend that EV-related stocks are favourite. The majority of them struggle to make any headway. Tanfield Group has seen its share price crash from overhyped levels to what is now a pitifully low level. (Though they do actually make a profit and have no debt - so are better placed than some to survive the current gloom. Their net asset value is high enough to sustain a sizeable increase in the share price)

If it turns out that Ford has used its close working relationship to milk Smith of expertise, and to go it alone (or with some other) on the EV front, the Tanfield share price is doomed to stay low. But if Ford's promised announcement at the Detroit show 4 weeks from now does confirm Smith as their EV partner, I believe the Tanfield share price will soar. In the UK there are certainly plenty of investors listening very closely for any leak of information at present. On a purely speculative level, with its price so low, I believe it to be worth holding a few. Though obviously, everyone should do their own research.

Detroit's Been in Trouble Before - Why This Time Is Different

For those who (like me) do actually look forward to an all-electric transport future, and who want to take a stake in it, there is a company listed on the UK stockmarket, called Tanfield Group (LSE:TAN). Easily overlooked because it's main product is aerial work platforms. But they also own Smith Electric Vehicles - the world's biggest and oldest producer of roadgoing EVs.

Over a period of 80 years, Smith have quietly sold an estimated 70 thousand electric vehicles worldwide (!). And in the past year they have delivered more than 400 electric trucks and vans in England alone. Mostly the 7.5ton Smith Newton and the 3.5ton Smith Edison. Plus a few 9ton and 12ton versions. Check out the Case Studies page on their website www.smithelectricvehic...

Their newest (and smallest) product is the Smith Ampere - developed jointly with Ford, and displayed on Ford's own stand at the CV-2008 show last April, in Birmingham, UK. I don't know if this is the 2010 van which Ford intend releasing details of at the Detroit show next month - but if it is, the (currently depressed) Tanfield share price could fly.

Smith buy components from US companies, Valence and Enova. And are about to open van production facilities on US soil.