When a Chinese city of more than 8 million people talks, electric-vehicle makers listen.
In this case, Kandi Technologies has received a huge EV distribution agreement with the city of Hangzhou that will see 20,000 vehicles leased throughout the city in an effort to test vehicle-to-grid technology. As part of the agreement, China Aviation Lithium Battery Co. will provide the EV's batteries, while the electricity will be supplied for free by local utilities. Leasing will start next month and will conclude by the end of 2013. Hangzhou is located about 110 miles southwest of Shanghai. The city is the capital of Zhejiang Province.
Kandi's EVs have a top speed of about 25 miles per hour and weigh about 1,600 pounds. Forbes estimated that Kandi Technologies will make about $6,800 per vehicle during the duration of the leasing period. The Chinese government wants to have a half-millon EVs on China's roads by 2015 and 5 million by the end of the decade. If it can get another 250 Hangzhou-sized deals up and running, it'll be all set.
JINHUA, China, July 16, 2012--Kandi Technologies Corp. (the "Company" or "Kandi") (NASDAQ: KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and all-terrain vehicles (ATVs), today announced that the Company's wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. signed a cooperative letter of intent ("LOI") with China Aviation Lithium Battery Co., Ltd. ("CALB"), a subsidiary of Aviation Industry Corporation of China ("AVIC") in Beijing to promote 20,000 pure electrical vehicles in Hangzhou. Cooperation forum of municipal government and state-owned enterprise was held in Being on July 10th ,2012. There were over ten Strategic Cooperation LOIs signed between the companies from Jinhua city and major State Owned Enterprises of China at the Cooperation Forum in Beijing.
The LOI signed by Kandi and CALB is to facilitate faster development of China's electric vehicle industry and to secure Kandi and AVIC's leading positions in the EV and lithium battery industries. Their cooperation is also intended to promote structural development of China's automobile industry and accelerate transformation of economic growth pattern to fulfill the national goal of sustainable development. The State Grid Cooperation of China ("State Grid") will cooperate with AVIC through CALB for a 20,000 pure EV project through personal leasing method in Hangzhou, Zhejiang. Under the project, AVIC/CALB will be responsible to produce automobile-use lithium batteries and purchase 20,000 -electric vehicles for personal leasing, while the State Grid will be responsible for the construction and supply of the charging network to power the operation of 20,000 EVs as well as the procurement of integrated automobile-use power battery sets. The Hangzhou municipal government will provide financial subsidies and create supporting policies that are beneficial for the promotion of EVs.
- -This leasing project is led by the state and local governments' supporting policies, will fully explore the technology and scale advantages of cooperating companies, work closely with the State Grid's smart charging/powering network strategic plan, and it will become the first successful story of the EV operation in a large scale, which the Company anticipates will bring deep impact to the new energy industry of China and the world
According to the letter of intent, the project is expected to launch in this August, and is anticipated to be completed by the end of 2013. - If the cooperation and business model of this project are successful, it may be expanded nation-wide.