Ford has agreed to a joint venture with Chinese car manufacturer Zotye Auto to manufacture electric cars in China, CNET reports. This amount set in this joint venture is $765 million. Each company will get 50 percent stake in the joint effort, but will have to go through Chinese government for approval. Once the deal is complete, they will be able to build cars in China’s Zhejiang Province. Ford currently operates joint ventures with Changan Ford Automobile Corp. and Jiangling Motors Corp.
This is a big step forward for Ford into the EV industry. Ford and Zotye Auto are combining efforts after a mandate from the Chinese government requires foreign manufacturers to strike up partnerships with local companies in order to build cars domestically. Since Ford has to partner with a company, it decided to go the route with Zotye Auto. It doesn’t help that China also put quite the extra hurdles in place to build fossil fuel cars, as opposed to just banning the things outright. Ford earlier this year had announced that at least 70% of Ford-branded vehicles sold in China would offer electrified powertrain options by 2025. This move helps the company set a global footprint, especially accelerating its presence in China.
This partnership doesn’t mean that both companies will only make EV cars. CNET reports that the partnership could result in other “mobility” solutions. There were not specifics given, but this means that it’s referring to things such as bikes, ride sharing, caravan services, and so on. Ford pursuing this type of effort aggressively in China means to help those over-congested mega-cities. Both companies also plan to build dedicated product research and development center, and its own sales and services network, Ford stated. A new manufacturing plant will be constructed in Zhejiang Province, south of Shanghai.
“Subject to regulatory approval, Zotye Ford will introduce a new brand family of small all-electric vehicles,” Fleet said. “We will be exploring innovative vehicle connectivity and mobility service solutions for a new generation of young city-dwelling Chinese customers.”
Competitors such as GM have already struck similar deals in China. Ford has been under pressure to seek out such deal with a Chinese company. “Zotye Ford will introduce a new brand family of small all-electric vehicles,” Ford group vice president Peter Fleet said in the statement. “We will be exploring innovative vehicle connectivity and mobility service solutions for a new generation of young city-dwelling Chinese customers.”
China is struggling with the huge pollution levels in major cities. It’s aggressively seeking out plug-in vehicles and has not only poured tens of billions of yuan in investment but is going about the legal route to entice companies into the EV route as well.