By Joseph B. White
Electric cars are a tough sell to most U.S. motorists, but that didn’t stop a group of Detroit-based entrepreneurs from launching a new entry to the market Wednesday, this one with a venerable name.
A group led by a former executive of the U.K. sports car maker Lotus Cars is resurrecting the “Detroit Electric” brand, one of the leading names of the Motor City’s brief, early 20th Century status as a hub of battery-powered car innovation.
At a party in the Fisher Building, a monument to Detroit’s golden age, the company unveiled its first model—an all-electric, two seat sports car priced at $135,000. The car’s sleek exterior, built on a Lotus chassis, echoes the lines of a Lotus sports car. Tesla Motors Inc., the better known Silicon Valley electric luxury car startup, also began its corporate journey by offering a pricey, electric roadster developed around a heavily modified Lotus Elise chassis.
Detroit Electric’s launch comes at a challenging moment for investors and corporations that bought into the idea that electric cars were due for a 21st Century renaissance.
Sales of Nissan Motor Corp.’s Leaf electric have so far fallen short of the company’s expectations. Fisker Automotive, a luxury plug-in hybrid startup, has hired restructuring and bankruptcy advisers and effectively halted production. Tesla has projected a profit for the first quarter, but analysts say the company will need to raise, or generate, considerably more capital to fund the development of new models, including a family-sized sport utility and sedan that will sell for less than the nearly $70,000 starting price of its Model S.
The original Detroit Electric started operation in 1906 and folded in 1939 as the internal combustion engine solidified its dominance in the U.S. market, and the Great Depression forced a brutal consolidation of the U.S. car industry.
The new Detroit Electric, headed by Albert Lam, former CEO of the Lotus Engineering Group and former executive director of Lotus Cars, has taken little besides the name and a distinctive, retro logo from the old company. But it faces daunting prospects in a plug-in vehicle niche that has expanded little despite a growing number of new entries.
Mr. Lam, CEO of Detroit Electric Holdings Ltd., said his company “has learned from others ‘ mistakes,” and has the financing in hand from private sources to launch the roadster, the first of a projected three models. The company says it plans to build just 999 roadsters.
Mr. Lam said Detroit Electric will rely on contract manufacturers to assemble its higher volume cars, and thus should require less capital than a conventional car maker.
The company has promised to create 180 jobs in Michigan by the end of this year as it launches production this summer. It plans to show its car at the Shanghai auto show later this month, and promised to announce there “a major partnership with a global car maker.” The consensus among auto industry executives is that China will likely be a bigger market for electric vehicles than the U.S.
Detroit Electric won’t be alone in building plug-in cars in or near Detroit. General Motors Co. assembles its plug-in hybrid Chevrolet Volt at a plant that straddles the line between Detroit and a suburb, and Ford Motor Co. builds electric Ford Focus models in the Detroit suburb of Wayne.