By John Gartner
Chinese automotive companies have long aspired to build vehicles for the U.S. electric vehicle (EV) market, without much progress. However, recent developments indicate that Made in China could be stamped on cars stateside before long.
Chinese automakers Geely, BYD, and Wanxiang have all made investments in establishing or partnering with U.S. entities with the goal of opening China’s formidable manufacturing resources to America. Geely, which has been the slowest among the three to approach the U.S. market, purchased Emerald Technologies in February. The company, a start-up developing electric vans and taxis, has offices in the United Kingdom and Missouri. It will receive up to $200 million during the next five years from Geely to grow its business.
Geely is no stranger to EVs, having launched a successful EV carsharing joint venture in China with Kandi Technologies Group. The Emerald acquisition gives the company access to new technology outside of the consumer passenger vehicle market, which is a common strategy for Chinese companies that do not want to take on Detroit, Japan, and South Korea head-on in the United States – yet. If Chinese-built taxis, vans, and trucks can pass all of the required safety tests and prove their reliability in the coming years, then American consumers might become more comfortable in considering them. Geely purchased Volvo in 2010 and has been expanding globally during the past few years, including setting up shop in several countries in Eastern Europe and South America.
BYD was the first Chinese automaker to target the U.S. market and had announced its intention to sell EVs when it established a presence in California back in 2010. But the company has yet to deliver passenger vehicles. The latest target date for EVs in the United States from Warren Buffett-backed BYD is late 2015. Until then, the company is focused on selling electric buses using its battery packs in China, California, Canada, and Spain.
Wanxiang has been the biggest spender from China on U.S. EV assets: the company picked up the bankrupt pieces of battery maker A123 Systems and of Fisker Automotive for pennies on the dollar. Wanxiang recently said it would resume production of the aborted Fisker Karma (perhaps both as a gas car and plug-in electric vehicle) by the end of 2015, as well as complete the development of the Atlantic, the second EV promised by defunct Fisker. It would not be surprising to see more acquisitions of EV-related technology firms from Wanxiang in the United States in the future.
The U.S. EV market has taken three years to grow to just under 100,000 vehicles, but according to Navigant Research’s Electric Vehicle Market Forecast report, over the next three years it will more than double – reaching volumes that merit Chinese firms establishing North American assembly and manufacturing plants. Chinese companies will continue to learn more about optimizing EV production at home once a domestic market begins to mature in China, and this will lead to greater efforts to tighten the bond between the two countries’ EV industries. (Reprinted from the author’s article published in http://www.plugincars.com March 12, 2014)