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22 August 2017

Ford Forging JV With Zotye Auto To Tap Into China’s Huge EV Market

Ford Motor Co. is deepening its presence in China’s “new energy vehicle” landscape through a joint venture manufacturing deal with a Chinese electric carmaker.

The U.S. automaker today signed a memorandum of understanding with Anhui Zotye Automobile Co., Ltd., a manufacturer of all-electric vehicles. The two companies will delve into the development, manufacturing, marketing, and servicing of an all-electric vehicle line for the China market.

Ford sees the JV tied into its corporate sustainability campaign dedicated to improving air quality and facing climate change.

It also positions the company to tap into sales at the world’s largest market for battery electric and plug-in hybrid vehicles through the government’s NEV subsidy program. Ford forecasts that China will see at least 6 million NEVs sold per year starting in 2025, and that 4 million of that total will be all-electric vehicles.

Those NEV government subsidies may turn into sales volume requirements, with subsidies diminishing.

The Detroit automaker made its commitment to China clear in April with the announcement it would be launching the Mondeo Energy plug-in hybrid there early next year. It will be built through Changan Ford JV, a new collaborative business unit with local automaker Changan Automobile.

At that time, Ford also said that an all-electric small SUV will come to China in five years.

“The potential to launch a new line of all-electric vehicles in the world’s largest auto market is an exciting next step for Ford in China,” said Peter Fleet, Ford group vice president and president, Ford Asia Pacific. “Electric vehicles will be a big part of the future in China and Ford wants to lead in delivering great solutions to customers.”

Zotye Auto was one of the first automakers to produce all-electric vehicles for sale in China. The company sold more than 16,000 electric vehicles there through July of this year, a 56 percent increase year-over-year.

The Chinese automaker also produces vehicles powered by other sources.  The Zotye T600 crossover, shown above, is powered by a gasoline internal combustion engine. The automaker’s electric vehicle models are usually sold through the Zotye Zandu brand, which offers small electric car and hatchback models.

Zotye and Ford will create a new brand for the JV. Their goal is to grab significant share in China’s all-electric market.

More will be revealed later this year once the deal is solidified and gains government approval. Ford said that announcement will cover the brand name, vehicles in the pipeline, and production volume targets.

For now, it appears that the new EVs will only be sold in China.

“The MoU between Zotye Auto and Ford opens the door for us to explore our cooperation in the development of clean energy vehicles,” said Jin ZheYong, chairman and president, Anhui Zotye Automobile Co., Ltd., based in Huangshan, Anhui province “This presents us with an exciting opportunity to leverage each other’s strengths in achieving a win-win situation for both parties’ growth in the fast-evolving Chinese electric vehicle market.”

SEE ALSO:  Ford Launching Mondeo Energi And Electric Small SUV in China

Ford’s statement on the new JV reiterates the company’s commitment to introduce 13 new electrified vehicles globally in five years. The all-electric small SUV will go outside China to Asia, North America, and Europe. The April announcement also included a pledge to electrify 70 percent of all vehicles sold in China by 2025 through electrified powertrain options.

The new 50-50 JV with Zotye Auto will mirror two other JVs, Changan Ford and Jiangling Motors Corporation. The Chinese government set up this shared ownership model several years ago for international automakers to enter the China market. It’s helped China develop into the world’s largest market for new vehicle sales, and gives the government power over which vehicles come to market.

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