The U.S. based EV-maker Detroit Electric has signed a deal to manufacture electric SUVs in China. The agreement is a three-way joint venture with local firms China Smarter Energy Group (CSE) and the China Yixing Environmental Technology Industrial Park Development Corporation (ES&TP).
The new company is called (translated from Chinese) Emperor Electric Car Co., Ltd. Total investment is $1.8 billion. Registered capital is $600 million, the other 1.2 billion will be financed by bonds and bank loans, according to the company.
The shareholder structure is: a $300 million investment by Detroit Electric for 50% of the shares, $240 million by CSE for a 40% share, and $10 million by ES&TP for the last 10%.
The joint venture is set up for the development and manufacturing of electric vehicles, parts and related technologies. It will be headquartered in Hong Kong. Production will be located in the Yixing Environmental Technology Industrial Park, based in Yixing City in China’s Jiangsu Province, and operated by ES&TP.
According to the plans announced by the company construction of the production facilities will start this year, and will include an R&D center. The first car that will roll off the line will be an electric SUV, with other cars to follow. In 2020 the company plans to sell 100,000 cars, with a revenue of 40 billion yuan ($5.82 billion) and a pre-tax profit of 4 billion yuan ($582 million).
Detroit Electric has a long history, it was founded in 1907 and ceased operations in 1939. In 2008 the brand was revived by Albert Lam, former CEO of the Lotus Engineering Group. In 2013 the company unveiled its first vehicle, the Lotus Elise based SP.01 electric sports car. Originally Detroit Electric intended to make the SP.01 in the United States but eventually moved production to England with a European headquarters in the Netherlands. Detroit Electric and its Hong Kong distributor started looking for a Chinese partner in 2016.
CSE is a Hong Kong-based publicly traded company, its principal activities are “solar energy business, investment business and fur business.” Until 2015 they were also involved in vanadium mining. In 2016 the company had revenues of HK$253,157,00 (32,600 million), plus 25.07% compared to 2015.