Actually, a giant new car dispenser in eastern China’s city of Hangzhou is an automated garage for 120 Kandi-brand EVs, but it essentially functions like a vending machine serving up these rental cars for only $3.25 per hour.
The name of the NASDAQ listed start-up car company – “Kandi Technologies Group” – and the similarity to a vending machine prompted a video documentary on this novel project, but underlying the whimsicalness are even more giant implications for urban transportation.
Hangzhou’s population in 2010 was 8.7 million, and according to filmmaker Aaron Rockett – who divulges he has a long investment in KNDI – it’s now closer to 10 million, and plans are for as many as 750 of these garages to be constructed all over the city in the next four years.
Already 50 more garages under construction are due for completion by March 2014, and card-wielding customers will be able to receive and return cars to any one of these strategically positioned car dispensers in a network modeled on already successful bike sharing programs.
Kandi’s entrepreneurial project is part of a 50-50 joint venture with Geely, best known for buying Volvo, and supported also with $65 billion in government monies. The plan is expected to see 100,000 new EVs within four years trolling the streets in this city that’s larger than Manhattan, with plans to spread to cities as much as three-times larger.
China’s population is 1.35 billion, but car ownership is one-tenth the percentage of U.S. car ownership, or about what America was like during World War II.
With massive economic expansion in the awakened giant of a country, many Chinese citizens want to graduate from bicycles and scooters, skip the bus and subway, and have their own set of wheels. At the same time, if China were to follow the U.S. model of privately owned gas cars, these would make already bad air quality worse, put an enormous draw on limited global petroleum resources, and costs and congestion would also threaten the country now experiencing explosive growth.
As an alternative, the tiny smart-car like EVs from Kandi are a big step up from the 120 million electric bikes and scooters now relied upon in China, say promoters, and offer a 50 mph top speed, and range of 75 miles per charge.
While range is short, with Kandi’s facilities to be placed all over town, and a side-slide swappable battery, threats of “range anxiety” are eliminated, says Houston-based retired investment banker, Arthur Porcari, who also is investing in the startup company which presently has 3 percent of China’s market share.
The Kandi cars have amenities like power windows, A/C, stereo, and, say promoters, allow people to enjoy the consumer lifestyle Americans take for granted – buying big things like TVs and what have you – and carting them back home.
Aside from hourly plans, longer term rentals for around $130 to $160 per month are also offered and these include insurance, maintenance and electricity to recharge the EVs.
The side-swappable batteries were designed and implemented by Kandi.
Throwing cold water on the grandly presented plan however, are contrarian voices who cite other competitors in China, excessive production capacity, and insufficient demand.
Alleging Kandi has been hyped out of all proportion, an October article on Seeking Alpha by Richard Pearson contradicts bullishness.
Contradicting this in turn, a November piece by Aaron Rockett who produced the video below, opines on the same investor site that Kandi is “China’s Sweet EV Solution.”
To be sure, articles have been known to move stocks, and conflicts of interest are inherent in such reporting, but intermingled with reasons to doubt are reasons for hope as well.
However the future pans out, Kandi’s plan is being praised for potentially solving pollution that’s worse than in American cities, huge parking issues, and costs are cheaper than gas cars.
So far, says Porcari, the prospects look feasible and he sees more growth potential with Kandi than he has with any other opportunities in the past 40 years.
Promoters say Kandi’s car share program could become a new take on mass transit uniquely adapted to dense Chinese cities.
And, say proponents, it threatens to change the entire paradigm of private car ownership as urban planners contemplate the realities of dense mega cities and attendant challenges that come along with.
By contrast, the U.S. is apparently on a slower path to EV proliferation, with President Obama’s goal of 1 million EVs and PHEVs on the road by 2015 a seemingly moving target.
Many pre-existing expectations and habits are in place in the U.S. keeping the country wedded to an entrenched industry and lifestyle, but in China many have nowhere to go but perceptibly up. It’s thus being said the Chinese may bypass many of America’s issues associated with private car ownership, and skip ahead to most of the benefits, without some of the hassles.
If its plan is proven successful, Kandi’s car sharing business model is expected to go to other cities and regions including Shanghai, Shandong, and Hainan.
What’s more, says Forbes, it is an adaptable concept that could spread beyond China’s borders.
The company has of course not escaped the attention of other investors. It has also prompted write-ups by the Motley Fool, and others.
To be sure, this is a high-risk, high-reward venture in the making. More needs to be proven, challenges remain, so we shall see where it all goes.