e.GO Mobile secures new investment to save the company from closure
02 September 2020
2 September 2020
German electric-vehicle (EV) manufacturer e.GO has secured fresh investment following insolvency proceedings brought about by the coronavirus (COVID-19) pandemic.
The company has been saved by Dutch private equity firm nd Industrial Investments, part of nd Group, which becomes the majority shareholder in the business, and rebranded as Next.e.GO Mobile. The company states that all employees will be transferred to the new business, while Ulrich Hermann has been appointed as the new CEO.
Impacted by the COVID-19 pandemic, e.GO Mobile, previously valued at more than €1 billion, filed for insolvency under its own administration on 2 April. The purchase contract with Next.e.GO Mobile SE was notarised at the end of August with the completion taking place on 1 September. The purchase price is undisclosed.
e.GO Mobile founder GÜnther Schuh remains with the business, taking over as the chairman of the administrative board along with other board members.
As soon as approval of the new company as a vehicle manufacturer is granted and the supplier contracts have been updated, activity at the Aachen Rothe Erde plant is to start anew. Service and sales of the small electric car e.GO Life is already active again.
′We didn’t just want to survive the pandemic and the crisis it caused, we wanted to come out stronger and become the German icon that e.GO is destined for,’ commented Schuh. ′To do this, we needed to find a professional and strategic partner with whom we could realise our great growth potential. We found that with our new partner and its visionary leadership.’
e.GO Mobile was at the forefront of the independent German EV industry, having secured a deal with Volkswagen Group (VW) to use its MEB platform to develop a new model. The company was expected to build a version of VW’s I.D Buggy concept shown at the Geneva International Motor Show in 2019.
The independent carmaker also formed a joint venture with German supplier ZF to build an electric van. The venture, e.GO MOOVE, unveiled its concept in December last year. Next.e.GO Mobile has announced it will be taking over all subsidiaries of the business, meaning this partnership is likely to continue.
The investment in e.GO highlights the appeal of startup carmakers in an ever-changing market. As EV development continues, the emerging market is proving attractive to companies who feel they can compete in a level playing field with bigger manufacturers. Next.e.GO Mobile is joined by US firm Fisker in this respect, developing new models on the MEB platform, although the latter has missed its intended deal date with the German carmaker. Others, such as Lucid, Faraday and Nio, are setting out on their own paths.
Meanwhile, British chemicals firm Ineos is taking a different approach, building a new vehicle, the Grenadier, to fill the void left in the off-road market caused by manufacturers switching to eco-friendly vehicles.
′e.GO Mobile was not a classic restructuring case, but a well-positioned startup with a proven car on the road that ran out of growth capital, predominantly due to the unprecedented situation during the coronavirus pandemic,’ commented Paul Fink of law firm FRH DÜsseldorf, the general representative of e.GO Mobile AG during the insolvency proceedings.