For those with a knack for names, Kandi Technologies Group's Zhejiang Kandi Vehicles Co. and Geely's Shanghai Maple Guorun Automobile Co. have formed a joint-venture called Zhejiang Kandi Electric Vehicles Investment Co., in which each side has put up about $80 million. The purpose is to ramp up the development of neighborhood electric vehicles (NEVs), which analysts say could see a sales surge because of their relatively low price and the notorious street congestion and pollution of China's largest cities.
Last summer, Zhejiang Kandi Vehicles reached what was regarded as the largest-ever electric-vehicle distribution agreement in China when it agreed to sell as many as 20,000 EVs to the city of Hangzhou, the capital of Zhejiang Province, as part of a vehicle-to-grid technology-testing program. Last October, the Kandi unit reached what was called a "definitive sales contract" to sell 5,000 of those EVs (batteries not included) to the city for about $31.6 million, or about $6,300 each. Plug In Cars notes that it's not verified whether the Kandi division has made good on those deliveries. Either way, those EVs are said to have a top speed of about 25 miles per hour and weigh about 1,600 pounds. In 2010, Geely acquired Volvo from Ford for $1.8 billion. Check out Kandi Technologies' press release below.
HANGZHOU, China, Feb. 4, 2013 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (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 on February 1, 2013, the Company's wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ('Kandi Vehicles') has signed a cooperation framework agreement with Shanghai Maple Guorun Automobile Co., Ltd. ('Shanghai Maple'), a 99% owned subsidiary of Geely Automobile Holdings Ltd. (Hong Kong Stock Exchange, Stock Code: 175) ('Geely Auto'), to establish a joint venture company, named Zhejiang Kandi Electric Vehicles Investment Co, Ltd. ('JV Company') to engage in the investment, research and development, production, marketing and sales of electronic vehicles in China. Geely Auto is one of the largest and most well-known automobile manufacturers in China. In August 2010, Geely Auto acquired Volvo Car Corporation from Ford Motor Company.
Pursuant to the terms of the framework agreement, the JV Company will be owned 50% by Shanghai Maple and 50% by Kandi Vehicles. The registered capital of the JV Company will be RMB1,000,000,000, and with 50% to be contributed by each party. Upon the establishment of the JV Company, the JV Company will acquire certain assets from Kandi and Geely Auto in order for the JV Company to process the necessary properties, assets and technologies to conduct the EV business.
To enable the proposed enterprise to take place, both Kandi and Geely Auto will establish new wholly-owned subsidiaries and inject certain assets into these companies. The JV Company will then acquire all the equity interests in each of these companies. As the principal terms of the potential transaction are yet to be finalized, we will make further announcements pursuant to the requirements of the rules and regulations as and when appropriate.
The purpose for Kandi to enter into the framework agreement is to leverage on the strength, resources and expertise of both Kandi and Geely Auto in the electric vehicle segment in China. With the concerted efforts from both parties, there will be synergy for the JV Company to become an industry leader in the EV segment in the future, which will be beneficial to both Kandi and Geely Auto.
The board of directors of the JV Company will consist of four directors, of which two will be nominated by Kandi Vehicles and two will be nominated by Shanghai Maple. Mr. Shufu Li, Chairman of Geely Auto will be appointed to be the first Chairman of the JV Company and Mr. Xiaoming Hu, Chairman & CEO of Kandi will be appointed to be first General Manager. Each appointment is for a term of three years.
Mr. Xiaoming Hu, Chairman & CEO of Kandi comments, "In the past decade, the electric vehicle development has enabled EV segment to become an important component of the global automobile industry. Given the growing trend of environmental awareness of consumers as well as the fast development of the EV industry, China's EV market presents tremendous growth potential and opportunities to Kandi."
"The purpose of the framework agreement is to leverage Kandi and Geely Auto's strengths, resources and expertise in EV in order to generate synergies through the joint efforts. I am confident that the JV Company will soon become the EV industry leader in China and with this win-win cooperation, Kandi will embrace an even more exciting new era of EV in the future." Mr. Hu concluded.
About Kandi Technologies Group, Inc.
Kandi Technologies Group, Inc. (Nasdaq:KNDI) is a manufacturer and exporter of a variety of vehicles in China, making it a world leader in the production of popular off-road vehicles (ORVs). It also ranks among the leading manufacturers in China of all-terrain vehicles (ATVs), specialized utility vehicles (UTVs), and a recently introduced second-generation high mileage, two-seat three-wheeled motorcycle. Another major company focus has been on the manufacture and sale of the COCO electric vehicle (EV), a highly economical, beautifully designed, all-electric super mini-car for neighborhood driving and commuting. The convertible and hardtop models of the COCO EV are available in the United States and other countries, while the Chinese government has approved the sale of Kandi EVs in China since 2010. More information can be viewed at its corporate website is http://www.kandivehicle.com/.