Ford, Zotye Sign $756 Million Electric-Vehicle Deal
Ford Motor Co. and China’s Anhui Zotye Automobile have agreed to set up a joint venture to build electric passenger vehicles in China.
The news, announced Wednesday, comes two months after the pair said they intended to form the venture.
The total investment is estimated at 5 billion yuan ($756 million) and both partners have a 50% stake in it.
Once Chinese regulators sign off on the deal, the new venture — Zotye Ford Automobile Co. Ltd. — will open a new manufacturing plant in Zhejiang province and produce all-electric vehicles under a new Chinese brand name.
The move is part of Ford’s efforts to meet China’s new quota system aimed at encouraging zero-emissions vehicles. Announced in September, the system requires that a certain percentage of a vehicle-maker’s sales be either electric vehicles or hybrids by 2019.
The venture is targeting 10% of the electric-vehicle market in China, with a planned yearly capacity of 100,000 units, the companies said in a statement. Based on its total sales in 2016, the automaker would need to sell 20,000 electric vehicles in China next year to meet the quota.
Ford has existing joint ventures in China, with Chongqing Changan Automobile Co. Ltd. and Jiangling Motors Corp. Ltd. Chinese law has long limited foreign firms to two such joint ventures, but in 2015 Beijing relaxed that rule to allow foreign companies to form a third joint venture if the companies produce new-energy cars.
China’s new-energy vehicle market has taken off in recent years due to a series of government incentives, including subsidies, which will be phased out over the next few years. The country is now the world’s largest manufacturer of electric vehicles, with more than 500,000 units sold last year.
With Beijing’s introduction of the quota system, foreign automakers have been ramping up efforts to compete in the fledging market.
In June, state-owned Anhui Jianghuai Automobile Co. Ltd. and Germany’s Volkswagen announced they had formed China’s first all-electric-vehicle joint venture, in a 50-50 partnership.
General Motors has said that nearly all models from its brands in China would be either hybrid or fully-electric by 2025.
Volvo Cars, owned by China's Zhejiang Geely Holding Group Co. Ltd., said it would produce electric cars in China beginning in 2019.
Contact reporter Mo Yelin (email@example.com)
- 1In Depth: The Never-Ending Battle to Curb China’s Hidden Debt
- 2Cover Story: The Rapid Fall of China’s Most Famous Corporate Raider
- 3New Covid Cluster in East China Elementary School Linked to Returnee From Singapore
- 4Weekend Long Read: What Does China’s Consumption Slowdown Mean for the Economy?
- 5Evergrande Offers Retail Investors Three Payment Options
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas