Chinese investors are increasingly placing bets on American companies that produce electric vehicles.
A core reason behind this is the Chinese government’s increased incentivizing of companies encouraging them to develop and sell more EVs. Given the large size of the Chinese market, that means there are a lot of opportunities to sell EVs in China.
That, in turn, means good things for American EV makers, particularly smaller companies which might not otherwise have been able to survive without the help.
One of these is Atlanta-based Wheego. Three years ago, when Wheego needed money to expand, it received funding from Chinese investment firm GSR Ventures, on the condition that it focus more on China. Now, most of Wheego’s sales are in China.
Another example is Smith Electric Vehicles, which makes commercial vans with EV power.
Smith had sold about 800 units in the U.S. between 2010 and 2014, but a lack of profitability led the company to stop operating for a brief time. To the rescue came Hong Kong-based FDG Electric Vehicles which gave Smith a $20 million shot in the arm while another $15 million investment came in May 2015 as the Smith formed a joint venture called Prevok.
FDG owns assembly and research and development facilities in China, but needed Smith’s experience. Prevok, the joint venture, is in the process of designing a medium-duty EV van that will be built in the Chinese city of Hangzhou. There are plans to import the van to the U.S. later this year, and North American production is also planned.
A Chinese government push for 5 million “new energy” vehicles on the road by 2020 – “new energy” includes EVs, plug-in hybrids, and fuel cells – is helping spur Chinese investment in EV makers, as is the upping of a government mandate that municipalities must buy a certain percentage of “new energy” vehicles. The percentage was lifted from 30 percent to 50 percent in February of this year.