Chinese Investors Keeping US EV Startups Afloat
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Originally published on Sustainnovate.
Supported by the Chinese government’s generous electric vehicle (EV) incentives, interest in the country’s market has been growing rapidly in recent years.
As a result, Chinese investors have been showing increased interest in US-based EV companies and startups — sometimes to the point of being all that’s keeping them alive, according to the Chinese auto-industry expert Alysha Webb, writing for Automotive News (h/t Green Car Reports).
A case in point would be the Atlanta–based company Wheego Electric Cars — a maker of “neighborhood-sized” EVs. The company was on the lookout for needed funds back in 2013 and subsequently made a deal with the Chinese firm GSR Ventures — following which, the company now sells the vast majority of its EVs in the Chinese market, owing to a stipulation to focus on the market that came with the funding.
Another good example is Smith Electric Vehicles — a manufacturer of commercial electric vans. Following a suspension of activities in 2014 owing to financial issues, the company got $20 million and then a further $15 million from the Hong Kong–listed FDG Electric Vehicles, with the creation of a joint-venture dubbed Prevok accompanying the investments.
The joint venture is now working to develop an electric van for manufacture and sale in China. Plans do call for the van and manufacture to also expand into the US market as well, though.
An interesting situation, and, until incentive levels similar to those in China are unveiled in the US, one that is likely to continue. A change could be in the offing, though, once EV battery production costs come down enough. However, considering that there are likely to be supply constraint issues for some time, perhaps not.
Image via wheego
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