Kandi Technologies, Corp. announced today that its wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”) has signed a sales contract with China Aviation Lithium Battery (Hangzhou) Co., Ltd. (CALB Hangzou) to provide the first 5,000 EVs for the Hangzou EV project.

This follows the July 10 signature of a letter of intent between Zhejiang Kandi Vehicles Co., Ltd. and CALB at the Cooperation Forum in Beijing to collaboratively promote 20,000 pure electrical vehicles in Hangzhou, Zhejiang.

Today’s signature officially pushes forward the first 5,000 units of what is currently known as the largest pure EV commercialization launch in China.

According to the July letter of intent between Kandi Vehicles and CALB for the purpose of promoting the 20,000 pure EV leasing program in Hangzhou, CALB established a wholly owned subsidiary, CALB Hangzhou Coin Hangzhou city to specifically facilitate the implementation of the leasing program.

CALB Hangzhou will be responsible for the operation of the Hangzhou project. In furtherance of the letter of intent, on Sept. 29, 2012, Kandi Vehicles and CALB Hangzhou entered into a definitive sales contract.

Both parties revealed the principal provisions of the contract as follows:

1. CALB Hangzhou will purchase 5,000 JNJ6290EV model pure electric vehicles (without batteries) from Kandi Vehicles and the total purchase price will be RMB 199,000,000 (approximately $31.58 million). The unit price without the battery is at RMB39,800 (approximately $6,317).

2. Under the sales contract, the temporarily scheduled deliveries of the 5,000 vehicles will occur from Sept. 29 to Dec. 31, 2012.

3. Kandi Vehicles will deliver the vehicles upon receipt of a written confirmation notice and full payment of CALB Hangzhou. The orders will be delivered in several installments. Kandi Vehicles is obligated to deliver the ordered EVs to the designated places in Hangzhou City within 7 business days upon receiving the confirmatory notice and the payment.

4. Kandi Vehicles will ensure that the electric vehicles meet the strict quality standards and technical parameters of Chinese Government and CALB. For instance, Kandi Vehicles’ EV must be on the list of “Approved Passenger Vehicles” and “Recommended Models for Energy Saving/New Energy Vehicle Demonstration and Promotion in China” of Ministry of Industry and Information Technology.

5. Kandi Vehicles will ensure that the electric vehicles in the contract meet all the technical requirements for the existing and future battery charging/exchanging infrastructures, such as the Quick Battery Exchange (QBE) stations that are in construction by State Grid Corporation of China (SGCC).

6. Kandi Vehicles will provide necessary post-sale customer service, training and maintenance for the Hangzhou EV leasing program.