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Struggling Saab finds partner on electric vehicles

Deal is part of a $12 million grant from Swedish Energy Agency to advance an all-electric, zero-emissions version of Saab 9-3.

A prototype of the ZE Saab 9-3.

Lithium-ion battery manufacturer Boston-Power and Swedish automaker Saab are collaborating on a zero emissions version of the Saab 9-3, both companies announced Wednesday.

The ZE Saab 9-3 (ZE for zero emissions) would be an all electric vehicle with a Boston-Power battery.

Many may wonder why Boston-Power would get involved with the struggling, for-sale Saab. But for the Massachusetts-based battery manufacturer, which has been trying to get into transportation batteries, the partnership makes sense, considering its associations.

In January 2009, Boston-Power received $55 million in series D fundingfrom a group led by Foundation Asset Management, the investment arm of a Swedish foundation. The funding was intended to establish battery manufacturing for transportation applications, which Boston-Power started doing in May 2009.

Previously, the company manufactured laptop batteries. It was most noted for its Sonata, a long-lasting battery found in certain models of Hewlett-Packard laptops.

The deal is part of an 86 million Swedish kronor (about $12 million) grant from the Swedish Energy Agency to promote green transportation and electric vehicles. As part of the grant agreement, the group plans to produce at least 100 ZE Saab 9-3 cars by the end of 2010.

The coalition also involves electric power train designer Electroengine, engineering management company Innovatum, and the Swedish industry organization Power Circle.

Though it could be an an effort to make the financially struggling automaker seem more attractive to possible buyers, the timing of the announcement is curious.

On Monday, Saab's parent company, General Motors, announced a deal to sell Saab branding rights in China to the Beijing Automotive Industry Holding Corporation (BAIC) along with "certain Saab 9-3, current 9-5 and powertrain[sic] technology and tooling," according to a GM statement.

Then on Tuesday, GM said it's close to cutting a deal to sell Saab to the Holland-based sports car maker Spyker.