Detroit Electric forms EV venture with China's Geely
DETROIT (Reuters) - Detroit Electric, the Michigan-based startup electric-car maker, said Thursday it will partner with China's Geely Automobile (0175.HK) to develop electric cars for the Chinese market.
Geely owns Sweden's Volvo Cars and recently withdrew as a potential bidder for Fisker Automotive, the failing California green-car startup.
Detroit Electric earlier this month unveiled its own model, a $135,000, battery-powered sports car that it says will go into limited production in August in the Detroit area.
Geely and Detroit Electric are jointly developing a pure-electric version of Geely's Emgrand EC7, a compact sedan about the size of a Honda Civic. The Emgrand EC7-EV is slated to go on sale in the first quarter of 2014, with annual sales gradually ramping up to 30,000 within three years, the partners said.
The partnership was announced this week at the Shanghai Auto Show, as Chinese carmakers try to balance the government's efforts to promote green cars with Chinese consumers' overwhelming disinterest in electric and hybrid electric vehicles.
Beijing's so-called 'new-energy' car policy, which aims to put half a million EVs and hybrids on the road by 2015 and 5 million by 2020, has failed to gain traction, despite a flurry of incentives to customers and auto companies.
Detroit Electric said it would form a joint-venture company with Geely to manufacture EV components for Geely's electric cars near the Chinese's firm's Hangzhou headquarters.
"I am confident that we can become a leader of pure electric vehicles in the Chinese market within the next 18 months," said Detroit Electric CEO Albert Lam in a statement.
In March, Geely formed a $160-million electric-car joint venture with China's Kandi Technologies Group (KNDI.O) to build battery-powered minicars primarily for urban commuters in China.
In March 2012, Geely announced a deal with its Volvo subsidiary covering the joint development of electric-vehicle technology, including plug-in hybrids.
"It's a strategic imperative for us to try to unlock the synergies within the group," said Geely Chairman Li Shufu at the time.
At the early April unveiling of Detroit Electric's first car, CEO Lam said the company planned to introduce four more electric vehicles, including a hatchback and a sedan, by late 2014. Unlike the $135,000 sports car, Lam said the next models would be "priced for everyday users."
Lam also said Detroit Electric was looking to raise another $50 million to $100 million from investors to help fund the new models.
He said Detroit Electric would source a number of its components from overseas suppliers, and expected to name a Chinese partner at the Shanghai show.
Lam said Detroit Electric was targeting 10,000 electric-car sales in 2014, growing to 45,000 by 2017, with 45 percent of its sales in the United States.
(Reporting by Paul Lienert in Detroit; Editing by Nick Zieminski)
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