Geely Automobile's Hong Kong-based subsidiary Shanghai Maple Guorun has signed a deal with Zhejiang Kandi Vehicles to set up a 50-50 joint venture (JV) in China.
The new JV to be called Zhejiang Kandi Electric Vehicles Investment (JV company) will be engaged in the investment, research and development, production, marketing and sales of electric vehicles (EVs) in China.
Following the establishment, the new JV will acquire certain assets from Kandi and Geely Auto in order to process the necessary properties, assets and technologies to conduct the EV business.
In order to allow the proposed enterprise to take place, both the companies will form new wholly-owned subsidiaries and inject certain assets into the companies, following which the new JV will acquire all the equity interests in each of the companies.
The companies are expected to invest JPY1bn ($160m) in the new JV.
Kandi chairman and CEO Xiaoming Hu said that in the last ten years, the electric vehicle development has enabled EV segment to become an important component of the global automobile industry.
"The purpose of the framework agreement is to leverage Kandi and Geely Auto's strengths, resources and expertise in EV in order to generate synergies through the joint efforts," Hu said.
