July 8, 2010 / 10:27 PM / 9 years ago

Electric carmaker ZAP plans JV with China's Jonway

* ZAP to acquire majority stake in Jonway Auto

* Jonway Group to acquire 31.5 mln shares of ZAP

* ZAP shares rise 8.9 pct to 49 cents

DETROIT, July 8 (Reuters) - Money-losing U.S. electric vehicle company ZAP ZAAP.OB said on Thursday it planned to take a majority stake in Zhejiang Jonway Automobile Co Ltd and focus on China’s commercial and government fleet market.

ZAP said it would pay $29 million cash for a 51 percent stake in Jonway Automobile and create a joint venture with the Jonway Group unit. ZAP also said it has an option to acquire the remaining stake by March 30 of next year.

The agreement was reached on July 2 and requires government approval.

Jonway Group also will receive 31.5 million ZAP shares in a commercial transaction that gives the U.S. company exclusive international distribution rights for battery-powered electric vehicles the venture produces and nonexclusive distribution for gasoline engine-powered vehicles, ZAP Chairwoman Priscilla Lu said.

ZAP posted net losses of $28 million in 2007, $9.8 million in 2008, $10.7 million in 2009 and $3.2 million in the first quarter, according to U.S. regulatory filings.

ZAP and Jonway Automobile announced in January a partnership to build an electric SUV, targeting the taxi and government markets in China. ZAP has produced prototypes.

“We need to focus on the corporate fleet and the government accounts and differentiate ourselves from everyone else,” ZAP Chief Executive Steve Schneider said.

ZAP shares rose 8.9 percent to 49 cents in over-the-counter trading on Thursday. (Reporting by David Bailey; editing by Andre Grenon)

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