Ford, Chinese partner form electric auto venture

Ford, Chinese partner form electric auto venture

Ford is also going to build a third joint venture, which will be dedicated to electric cars, after it signed a 5 billion yuan ($755 million) deal on Wednesday with Chinese carmaker Zotye Auto.

The news, announced Wednesday, comes two months after the pair said they meant to form the venture. The new JV will leverage a combined investment of 5 billion RMB (approximately USA $756 million).

The new joint venture, Zotye Ford Automobile Co.

Peter Fleet, Ford's Asia-Pacific president, will be meeting with President Donald Trump and China's Xi Jinping later this week to discuss the deal.

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Ford had pledged in the past that it needs at least 70 percent of its Chinese sales to be electrified by 2025, and this puts Ford on the right path to achieve that goal. It sold more than 22,500 all-electric vehicles in the first 10 months this year, up 14 percent year-on-year.

China will also impose in 2019 a quota requiring automakers to produce a minimum number of new-energy vehicles.

In addition to the new JV, Ford and Zotye will explore offering mobility services to consumers in China as local demand for such solutions continues to grow. China is implementing a cap-and-trade framework next year that will penalize companies that don't meet fleet-based limits. "Zotye Ford will introduce a new brand family of small all-electric vehicles". Deliveries of such vehicles rose 53% to 507,000 units in 2016, according to the China Association of Automobile Manufacturers. It also said the government will initiate a pilot program before June 2018 that will relax foreign firms' ownership restrictions for new energy and special use vehicle businesses established in free trade zones. Daimler AG and BMW AG also have electric auto brands under their partnerships with BYD Co. and Brilliance China Automotive Holdings Ltd. New entrants are also coming in.

"To the extent that customers have more disposable income, which they will over time in China, clearly that's an opportunity for us", Ford's Shanks said.

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