UK motor-maker abandons Sunderland production line plans
The British electric motor developer and manufacturer, Saietta, has abandoned plans to manufacture electrical steering pumps at a former ZF Automotive plant in Sunderland. It says it has been unable to reach commercial agreement on a contract to manufacture the pumps for a customer and that it has received a £600,000 offer for the production line. Following the news, Saietta’s share price fell by more than half.
Saietta is continuing to work on other projects including a joint venture, called Saietta VNA, with an OEM customer to mass-produce its proprietary axial-flux and radial-flux motor technologies. This includes pilot production of axial-flux drives for three-wheeled vehicles which is already underway, with commercial production due to start in October 2024
Saietta has also received a purchase order for radial-flux drives for three-wheeled vehicles, with pilot production due to start in July 2024. It is also hoping for an initial purchase order for axial-flux drives for four-wheel vehicles by the end of March 2024.
Saietta is also talking to a separate OEM customer about the potential sale of radial-flux eDrives for two-wheeled vehicles.
The contract manufacturing planned for Sunderland did not include the development of Saietta’s own products.
"The strength of relationship with our lead OEM and the market opportunity for our eDrive solutions remains very compelling,” says Saietta CEO, David Woolley, who took on the role last September. “Being unable to agree terms on a contract manufacturing opportunity is no reflection on the quality of the company's products.
“The sale of the redundant production line in our manufacturing hub in Sunderland makes sense for Saietta in comparison to a relatively low margin contract to manufacture a non-core product under license,” he adds. “This route allows Saietta to remain 100% focused on our strategic focus of providing proprietary eDrive solutions to manufacturers of lightweight electric vehicles. Whereas it does mean that Saietta will not benefit from contract manufacturing revenue from August 2024, it will deliver the significant immediate benefit of pulling forward £600,000 of income and cash into the financial year ending March 2024.”
The company says it has positive cash balances to take it through to the end of March 2024. It is talking to stakeholders about funding requirements beyond the end of the quarter. It is also trying to secure extra funding to take it through to being self-financing.
Saietta adds that it remains confident in its financial forecasts for the financial year ended 31 March 2024, but forecasts for subsequent years will “inevitably” be affected by the developments at the Sunderland site.
Saietta Group: Twitter LinkedIn
