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CALB likely to promote Hangzhou EV business model nationwide

HANGZHOU, Zhejiang – Henan-based lithium battery maker China Aviation Lithium Battery Co., Ltd. (CALB) aims to promote the Hangzhou EV leasing project pattern nationwide if it proves thriving, reported

CALB signed a deal with Zhejiang Kandi Vehicles Co. to purchase 20,000 electric cars for an EV leasing project in Hangzhou in July.

Kandi, a local manufacturer of special-purpose vehicles, is responsible for making the EVs. CALB will produce the battery packs. Charging and leasing services will be provided by a local power grid company and newly assembled business operators.

The leasing project will be started from September with 100 two-seater electric cars launched for service with monthly rental falls between ¥700 ($110) and ¥1,000.

According to Fang Rong, vice president of CALB, it will cost the company ¥600-¥800 million to purchase the vehicles. In the meantime, CALB will sell EV batteries to the power grid company for about ¥900 million.

“This is no big profit but it is of strategic importance. The Hangzhou project will have an impact on marketing and sales of lithium batteries,” said Fang. “We will expand the model to the Yangtze River Delta region and even the whole country if it proves successful.”

Statistics from China Association of Automobile Manufacturers show that China only sold 5,579 pure electric vehicles in 2011. Industry analysts believe if the Hangzhou project works, it will have great impact on the new energy vehicle industry as well as power battery industry.

Since the Hangzhou project is backed by the local government, Fang hopes the government could be conducive in a number of ways including subsidies and purchase tax cut.

“We hope Hangzhou municipal government can offer us free parking lots and allow our green cars to drive alongside the West Lake,” he added.

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