Have you driven a Fjord lately?

Think's zippy little Web-enabled, carbon-free electric driving machine could help reverse 100 years of automotive history, writes Business 2.0 magazine.

By Todd Woody, Business 2.0 Magazine assistant managing editor

(Business 2.0 Magazine) -- Three pinstriped London investors stand outside an electric car factory in the green fields of the Norwegian countryside, waiting their turns to test-drive a stylish two-seater called the Think City.

But first, Think CEO Jan-Olaf Willums takes the wheel. While the moneymen fiddle with their BlackBerrys, Willums, looking slightly rumpled like the academic he once was, turns the ignition, and the stub-nosed coupe silently rolls toward an open stretch of pavement. Suddenly he punches the pedal, and the car takes off like a shot, the AC motor instantaneously transferring power to the wheels. The only sound is the squealing of tires as Willums throws the little car into a tight turn and barrels back toward his startled guests.

THINKING DIFFERENT: Jon-Olaf Williams, the CEO of Think, will see the City but lease its battery as part of a 'mobility fee' that may include insurance and Wi-Fi access.
SMARTER ASSEMBLY REQUIRED: The City is built from prefabricated parts, allowing Think to place its factories near key markets.
STIRLING SOLUTION: Dean Kamen's heat engine could extend the Think's range by hundreds of miles, turning the car into a mobile generator.
One taxi company profits from going green in the busiest city in the world. CNN's Ali Velshi reports.
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"That looks fun," Frode Aschim of Range Capital Partners says with a grin. Minutes later, he slides into the driver's seat and speeds away.

Did someone kill the electric car? You wouldn't know it on this bright May morning in Scandinavia, where the idea of a mass-produced battery-powered vehicle is being resurrected and actual cars are scheduled to begin rolling off the production line by year's end.

The London VCs are just the latest visitors to make the trek to Think to meet Willums, a onetime oilman turned venture capitalist, sustainability guru, and solar entrepreneur.

Tesla Motors CEO Martin Eberhard flew to Oslo to take a spin and sent back his people to hammer out a deal to supply Think with high-power lithium-ion batteries. An executive from PG&E (Charts, Fortune 500), the giant California utility, dropped by during his vacation to talk about giving Think a foothold in the Golden State. Dean Kamen, inventor of the Segway scooter, paid a visit, became an investor, and is now working on what could be the next breakthrough in automotive technology (more on that later).

Shuttling between Oslo and California, Willums has raised $78 million from Silicon Valley and European investors captivated by the genial, soft-spoken Norwegian's vision of a carbon-neutral urban car. You might spot him at Buck's, the VC hangout in Woodside, or at a tech conference in Napa. Four months after Willums's investment group acquired Think last year, he was hammering out its strategy at a brainstorming session hosted by Google.

Willums's pitch is this: He's not just selling an electric car; he's upending a century-old automotive paradigm, aiming to change the way cars are made, sold, owned, and driven.

Taking a cue from Dell (Charts, Fortune 500), the company will sell cars online, built to order. It will forgo showrooms and seed the market through car-sharing services like Zipcar. Every car will be Internet-and Wi-Fi-enabled, becoming, according to Willums, a rolling computer that can communicate wirelessly with its driver, other Think owners, and the power grid.

In other words, it's Web 2.0 on wheels. "We want to sell mobility," Willums says. "We don't want to sell a thing called the Think."

That's a lot to ride on one tiny car. And it's a big gamble for consumers, particularly freeway-driving, SUV-loving Americans. But global warming, the boom in green energy, and the changing economics of electric car production -- doing for $100 million what Detroit does for $1 billion -- have unleashed forces that won't be as easy to crush as the EV1 electric car scrapped by General Motors (Charts, Fortune 500) in 2003.

"There is a fundamental shift happening that is going to require new business models," says Ed Kjaer, an electric vehicle veteran who runs the EV program for Southern California Edison. "The timing is right. We are on a path now toward electric cars, and there is no going back."

We've been down this road before, of course, most famously in the 1990s, when General Motors spent upwards of $1 billion to develop the EV1, a teardrop-shaped electric car designed to comply with a California zero-emissions regulation. Less well-known was Ford's foray into the electric car market -- the one that led directly to Willums.

Lagging its Detroit rival, Ford (Charts, Fortune 500) in 1999 had acquired Norwegian electric car startup Pivco, which it renamed Think Nordic. In the mid-'90s, Pivco had produced a small urban EV called the Citi, about 40 of which were sent to San Francisco as part of a pilot car-sharing program. "They were horrible little vehicles," recalls Tom Turrentine, a research scientist at the University of California at Davis's Institute of Transportation Studies.

But just before Ford bought the company, Pivco had rolled out a new version of the car. Renamed the City, it was a big step up. Among those leasing the car was a former Stanford graduate student named Sergey Brin. "We drove one a long time ago," Google co-founder Larry Page says. "Sort of a milk-carton-material car."

With its eye on the California market, Ford pumped $150 million into the company to design a next-generation City that met European and U.S. safety standards. But when it looked like the automakers were going to kill the California regulation, Ford promptly sold Think to a Swiss electronics company.

By 2006, Think was in bankruptcy. Willums, meanwhile, was about to leave his firm for private foundation work, having made a mint from his investment in REC, an $8 billion Norwegian solar energy company. But the little electric car manufacturer caught his eye.

"So I called the two other key investors in REC about buying Think," says Willums, 60. "We didn't know anything about the car business. But we knew how to build successful businesses."

Willums picked up Think, its factory, and Ford's nearly completed design for a new-model City for the fire-sale price of about $15 million. That freed him to think about how to create a 21st-century car company. Much had changed since Ford sold Think: Global warming was dominating the headlines, the Iraq war had Americans on edge about energy security, and governments were beginning to provide generous tax breaks for electric cars.

"We felt it would be more fun and more profitable to think radically different," Willums says.

One week after his offer for Think was accepted in March 2006, Willums happened to be in Berkeley, where he hooked up with Joel Makower, a well-connected Bay Area green business consultant. Through contacts at Google (Charts, Fortune 500), Makower arranged for Think to hold a brainstorming session at the Googleplex in Mountain View.

The question on the table, Makower says, was this: "If you could build a car company from the ground up, with all we know about the Web and mass customization and social responsibility and localization and sustainability and viral marketing, what would that look like?"

Think's factory in the rural town of Aurskog is more reminiscent of Ikea than of Henry Ford, with its louvered wood exterior, bright open spaces, and shiny surfaces. There's nary a drop of oil or smudge of grease on the factory floor. This is an assembly plant, and the company puts together the Think City much the way a child builds a model car.

"It's a rather low investment," says Think managing director Ole Fretheim. "We can put up new factories quite easily."

He points to the black steel chassis of a City standing on a nearby pallet; it's shipped preassembled from Thailand. At one station, workers attach the car's aluminum frame -- made in Denmark -- and drop in a French motor. At another station, prefabricated rust-and dent-resistant polymer-plastic body panels produced in Turkey are hung on the frame of a nearly completed car.

The modular design means that Think can change body styles -- a prototype of a sporty convertible is parked in one corner of the factory -- without major retooling. It also means that Think can set up shop near its primary markets so it doesn't have to export the finished cars.

I get behind the wheel of one of 10 prototype coupes. With baby-seal-eye headlights and a rakish rear, the black test car is about 2 feet shorter than a Mini Cooper but 6 inches taller, giving it a surprisingly spacious feeling -- an effect that is magnified by the glass hatch that stretches from roof to bumper and that makes parking just about idiotproof.

Start the car up, and the only sound is the annoying hum of its vacuum-pump-powered hydraulic brakes (to be replaced on the production version). Put the pedal to the metal and the City zooms off. It's no Tesla Roadster -- the current battery is speed-limited to 62 miles an hour. But it is nimble and quick and goes about 112 miles on a single charge. And it hits the red line on the fun quotient.

Which is the point, according to Willums. "The customers are the trendsetters, the early adopters, the people who had to have a Prius," he says in lilting, Norwegian-accented English. "We're definitely not the only car you own. The main thing we want to sell is not a car but a whole concept around the car: carefree, carbon-free mobility."

That means no showrooms or obnoxious salespeople. Want to test-drive the City? Send a text message to find the nearest Think About car-sharing franchise. If you like what you see, you customize and order your City online.

"The idea of the future is, Never build a car before it's paid for," Willums says. "Once you have the image that yours is a car to be discovered, people will be happy to wait for just the right car."

Because each vehicle is Internet-ready, you can text-message your vehicle to, say, check its battery charge. The City will e-mail you when it's time for it to be serviced. "If someone has a great idea for a software link to the Think, we say bring it," Willums says. "It's the users who come up with those features. We just give them the platform."

Think plans to sell the car but lease the battery as a way to overcome one of the biggest conundrums of electric cars. The battery is by far the most expensive component of the City, which will list for about $34,000 in Norway. Take the battery out of the equation, and Willums says he can sell the car for about $15,000 to $17,000 in the United States, with a "mobility fee" of $100 to $200 a month that might also include services like insurance and wireless Internet access.

Each car will come equipped with a Web-enabled "black box" to monitor the battery's performance. When the car loses some of its range as the battery degrades, Think will offer buyers the option of replacing it at the same cost or paying a lower monthly fee.

Capricorn Investment Group, a Palo Alto private equity firm that has invested in both Think and Tesla, intends to launch a battery-leasing company to jump-start that market. "You have a natural way to create a total maintenance package," says Capricorn co-founder and partner Ion Yadigaroglu. "You're not going to pay the gas station; you'll pay us a monthly fee to use a battery that our company owns, which can be replaced in later years."

Where's the market for the old batteries? One answer might reside in the basement of PG&E's corporate headquarters in downtown San Francisco. Against one wall, a nickel metal hydride battery salvaged from a wrecked Prius sits plugged into a standard utility meter. When a switch is thrown, the meter begins to spin backward as the battery feeds electricity into the grid.

PG&E plans to buy thousands of plug-in hybrid and electric car batteries that have outlived their usefulness for transportation but still retain capacity. The utility will install them in the basements of office towers and at electrical substations to store green energy produced by wind farms and solar arrays.

"It will make vehicle batteries cheaper," says Sven Thesen, PG&E's supervisor for clean-air transportation, who recently visited Willums in Norway to discuss collaborating with Think.

Mass production will also lower the cost of batteries. In May, Think cut a $43 million deal with Silicon Valley electric car startup Tesla to buy a version of the lithium-ion battery packs that the California company is using to power its forthcoming Roadster.

Like Tesla, Think is capitalizing on the billions spent to create such batteries for laptops and mobile phones. "I think those guys are very savvy businesspeople and are likely to pull it off," Tesla CEO Eberhard says of Willums et al. Tesla's batteries will not only bestow some Silicon Valley cachet on Think -- Brin and Page are Tesla investors -- but also give the City the oomph to do 85 to 95 mph on the highway, according to Willums.

But better batteries are only the beginning. If Dean Kamen has his way, the Think will change our relationship with the energy grid itself.

When I reach the top of a winding driveway leading to Westwind, Kamen's estate outside Manchester, N.H., I'm greeted by an employee rolling along on a Segway. Then Kamen, dressed in jeans and short sleeves, a smartphone holstered on his hip, comes whipping around a corner on a small black motorcycle that sounds like the starship Enterprise going to warp factor 8. It's an electric scooter equipped with a Stirling heat engine that is charging the vehicle's battery, providing virtually greenhouse-gas-free travel.

The iconoclastic inventor, who made his first fortune developing medical devices, has spent more than $40 million creating Stirling engines that can tap almost any fuel source, from restaurant grease to cow dung. He wants to equip the City with one, extending its range by hundreds of miles.

Kamen met Willums about a year ago and later visited Think in Norway. "He's a fun, gregarious, good guy," Kamen says. "Next thing I know, I'm getting sucked into this, and he's sending me a car, and -- son of a bitch -- I've got this car here and I'm putting a Stirling engine in!"

The navy-blue City is parked next to a 1913 Model T and an 1898 steam-driven car. Kamen opens a panel in the floor of the City's cargo area to reveal a silver cylindrical object -- a larger version of the Stirling engine that powers his scooter.

"You can plug the car into the wall to charge the batteries, or you can plug into this," Kamen says, noting that when it's connected to the City, his Stirling engine will meet indoor air-quality standards.

Kamen takes the City for a drive. "This little sucker will move," he says, talking a mile a minute as he accelerates past his wind turbine and down a hill. Right now this is just a hobby for the inventor, but Kamen thinks the car could be the killer app to move toward his vision of the future: mass-produced Stirling engines powering the world's off-the-grid villages.

If Kamen makes the Stirling work in an electric vehicle, Willums will get another power plant for his open-source car and a way to overcome drivers' fears that they'll run out of electrons in the middle of nowhere.

And that's just the start. Both men see the City as part of a network of mobile generators that can draw energy from the power grid and send electricity back during periods of peak demand. "If you have enough Thinks out there, you would literally change the architecture of the grid," Kamen says.

But for that to happen, you need a partner accustomed to managing vast amounts of data over global networks, a company like the one run by Kamen's pals Brin and Page. A couple of days after my visit to his New Hampshire home, Kamen flies to California to have dinner with the Google guys, carrying the schematics of his Think/Stirling hybrid.

"They're interested," Kamen tells me the next week. "Sergey loved his old Think. He's way enthusiastic about the new car."

Brin and Page took the first step toward Googling the grid on a sunny day in June when the search giant unveiled the vehicle-to-grid charging stations it had built with PG&E in a solar-panel-covered carport at the Googleplex.

While a gaggle of reporters looked on, Brin plugged a retractable power cord into a converted Toyota Prius. When he pressed a key on a laptop, a wireless signal instructed the car to send electricity stored in its battery back to PG&E. "People haven't been thinking of this on a large scale," Page says. "If you have a million of these cars, or tens of millions, it'll have a huge impact."

Google.org, the company's philanthropic arm, is creating a fleet of plug-in hybrids for an employee car-sharing program. Dan Reicher, Google.org's director of climate and energy initiatives, says he would consider including the Think City. "It's a very cool car," he says.

That's music to Willums's ears. He might describe the City as a computer on wheels, but in truth what he's selling is a rolling iPod -- a hip, desirable chunk of plastic and metal with Zenlike simplicity. Think plans to roll out its first cars in Norway in early 2008, then expand to other European countries. The Continent should be a rich market for Willums, given that electric car owners there often qualify for generous tax breaks and such perks as free parking.

The U.S. market, where he hopes to sell the City in selected cities in 2009, is more problematic. Turrentine, the UC Davis EV expert, wonders if the City can hold its own on U.S. highways. Even the company's supporters hesitate when asked about the prospects of selling an urban two-seater EV in the land of the SUV.

"I don't know. I don't know," says Tesla's Eberhard. "I'd like them to, obviously, because I want to sell truckloads of batteries to them. It could do well in San Francisco. It could do well in Manhattan."

One key hurdle: creating an infrastructure of charging stations. Hal LaFlash, PG&E's director of emerging clean-technology policy, thinks EV owners could well end up charging their cars at their office parking lots. Car-sharing services like Zipcar and Flexcar offer another opportunity. "The car-sharing market has certain pickup points, and we can work with them on charging infrastructure," LaFlash says.

Back in his Oslo office, Willums acknowledges those challenges. But he senses a shift in the wind -- one that Detroit and Tokyo have been slow to pick up on. The British and Norwegians, eager to prove their green cred, want to place fleet orders, he says. And one U.S. company, which he declines to identify, would like 400 cars. His goals are modest; he's talking about making 20,000 Citys a year. But even that would make Think the world's biggest electric car company.

Perhaps one indicator of people's willingness to think differently about cars is sitting outside in the parking lot. It's the dusty old-model Think in which Willums has been tooling around Oslo for the past four years.

"I drive two cars, a Volvo station wagon and the Think," says Willums, a car collector whose stable includes a '61 Austin Healey. "I use the Think every day. The others stay in the garage."

Todd Woody is the assistant managing editor at Business 2.0. Top of page

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