A Production Plan of 1 Million Electric Vehicles by 2030
At the Boao Forum for Asia 2017 Annual Conference on March 25, Jiang Xipei, founder, Chairman of the Board and Party Secretary of the Far East Holding Group, expressed during the video interview by Tencent Finance, the Group had entered the mid- and high-end electric vehicles field. According to proposed planning of the project, the first mid- and high-end electric vehicle should be assembled offline by 2019, and a total of 100,000 electric vehicles should be finished by 2021 and a total of 1 million finished by 2030.
On February 18, Far East Smarter Energy Co., Ltd. (600869.SH, hereinafter referred to as “Smarter Energy”), a subsidiary of Far East Holding Group, officially signed a contract with Detroit Electric Holdings Limited (hereinafter referred to as “Detroit Electric”) and Yixing Environmental Protection and Technology Industrial Park Development Co., Ltd. (hereinafter referred to as “Yixing Industrial Park”), to form a joint venture Detroit Electric Vehicles Co., Ltd. for the R&D, production and sales of finished electric vehicles, parts and components as well as relevant technologies.
According to Jiang Xipei, a total investment in the joint venture stood USD 1.8 billion with a registered capital of USD 0.6 billion, consisting of USD 0.3 billion contributed by Detroit Electric, accounting for 50% of the shares, USD 0.24 billion contributed by Smarter Energy, accounting for 40%, and USD 0.06 billion contributed by Yixing Industrial Park, accounting for 10%.
Founded by Anderson Electric Car Company in 1907, Detroit Electric was purchased by Albert Lam, former CEO of Lotus Engineering Group and Executive Director of Lotus Cars in 2008. Albert Lam once participated in the design of the first model of Tesla, whose roadsters gained some popularity in the international market. According to public information, the total assets of Detroit Electric reached USD 45,737,400 by the end of December 31, 2016, with annual operation revenue of USD 75,500 in 2016.
“We purchased a company named Far East First New Energy Co., Ltd. two years ago. The company, focusing on the production of 18650 lithium-ion power battery, ranks the first in China and the third in the Global, creating a platform for us to develop electric vehicles and new energy vehicles.” Jiang Xipei revealed that their partner Detroit Electric has a history of one hundred years, boasting outstanding brand, team and technologies. Besides, Detroit Electric is interested in entering the Chinese market. “As a result, it is a great opportunity for us to set up an OEM in Yixing, Jiangsu together with Detroit Electric. I look forward to obtaining relevant license files next year and providing our OEM products to the public.”
Jiang Xipei introduced that, according to the proposed planning by the joint venture, first mid- and high-end electric vehicle should be assembled offline by 2019, and a total of 50,000 electric vehicles should be finished by 2020; sale volume of new energy vehicles should reach 100,000 until 2021; volumes of both production and sale should reach 1 million by 2030.
Electric vehicle industry is the one need intensive funds, technologies and talents. “Someone says that if you love some guy, let him to manufacture a finished vehicle; if you hate some guy, let him do the same thing as your loved one do.” Jiang Xipei confessed, they would adhere to the commercial logic herein although it is with great challenges and has certain advantages. Firstly, talents play an important role in achieving this target, and Detroit team boasts comparative advantage in the aspect; secondly, we should secure sufficient capital and continuously provide the qualified investment here to complete capital arrangement; thirdly, Detroit owns its marketing team at abroad together with the one at home under construction. Therefore, we plan to develop domestic and international markets at the same place in the upcoming period, with emphasis on international market.
It was learned that the amount of USD 1.2 billion would be raised by the joint venture after its foundation through ways such as debt financing and bank loan.