US car manufacturing colossus Ford Motor has announced that it is currently weighing up the prospect of entering into a joint-venture with Chinese automotive firm Zotye. The collaboration between both parties would see them combine their expertise in order to develop and manufacture electric vehicles under a new brand - in a bid to exploit the boom for electric cars in the world's leading auto market.
China's government has launched several initiatives and programs specifically designed to combat alarming pollution levels in its major cities. The country is aggressively pushing the adoption of plug-in vehicles by investing tens of billions into research funding and subsidies for those who buy electric cars. This has subsequently led automakers from all over the world to launch new projects in China as they see the huge potential for growth in the electric car sector in the region.
US companies such as Tesla and General Motors have already announced its plans to produce electric vehicles in China, whilst German automotive firm Daimler AG has also disclosed that it plans to manufacture plug-in and hybrid cars in the country. Chinese authorities have already stated that they want electric, hybrid, and plug-in vehicles to make up at least a fifth of the country's car sales by 2025.
Ford released a statement earlier this week saying it had signed a MOU (Memorandum of Understanding) with Zotye Auto. It was also disclosed that both firms will build a new brand under which electric vehicles will be sold and will both acquire a 50-50 stake in the joint-venture. Ford, whose sales have declined by 7% in the country have identified China as the fastest growing market in the world for new energy vehicles (NEV) and forecasts that the segment will grow to six million vehicles per-year by 2025, which around four million would be all-electric.
This potential deal with Zoyte Auto represents another example of Ford's growing commitment to electrification. In April, it declared that it planned to be in a position to offer hybrid or fully electric cars of all models built in China by 2025 with its domestic JV partner, Chongqing Changan Automobile. However, at that time, it did stress that it would be adopting a cautious approach as uncertainty in the market remained in relation to consumer interest and government policy.
Zotye, is the electric incumbent in China, and is the market leader selling more than 16,000 electric vehicles this year through to July, which represented a year-on-year growth of 56%. The privately-owned company also manufactures sport utility vehicles and large cargo trucks. The firm which is headquartered in the coastal province of Zhejiang announced earlier this week that it had enjoyed a near six-fold jump in first-half profits.