KQED Radio’s Rachael Myrow visited ZAP in December for a series they are doing as part of their California Report, called “Shifting Gears.” She interviewed ZAP’s founder Gary Starr as well as ZAP Chairwoman Dr. Priscilla Lu in a piece called “California: EV Designer for the World.” The two ZAP executives offered incite into ZAP’s plans in China, including plans for acquiring Zhejiang Jonway Automobile Co. Ltd., which was announced yesterday. Tune into the podcast and view the slide show on KQED’s website.
Source: KQED News
ZAP Completes 51% Acquisition of China’s Jonway Automobile, Cathaya Capital Funds Total of US$36 Million
New U.S.-China Automaker Aims at Emerging Electric Car Market
SANTA ROSA, California (January 25, 2011) – Electric vehicle market pioneer ZAP (OTC BB: ZAAP) announced today that it has completed its acquisition of 51 percent of the capital stock of Zhejiang Jonway Automobile Co. Ltd. of Sanmen, Zhejiang, China. Cathaya Capital LP has funded the aggregate amount of US$36 million.
The final payment of US$19 million related to the acquisition was made on January 21, 2011 with the funding from Cathaya Capital. Total cash payment for the acquisition of 51 percent of Jonway Automobile was US$30,030,000.
With ZAP’s electric vehicle (EV) technology expertise and international experience, the combined company intends to build the necessary production platform to address the Chinese EV market. The newly combined company, to be renamed ZAP Jonway, will leverage Jonway Auto’s A380 SUV, as well as its established distribution channels to the Chinese market with over 90 direct dealers. ZAP Jonway will manufacture and sell SUVs powered by ZAP’s electric drive train and expects to benefit from the 60,000 RMB (approximately US$9,000) government incentives granted to electric car buyers.
Jonway Automobile anticipates vehicle sales for its gasoline A380 SUV to increase by 40 percent to over 10,000 vehicles in 2011 compared to 2010. In 2009, its first year of sales, Jonway Automobile experienced sales of 4,000 SUVs, which rose to over 7,000 in 2010, each with a sales price of around US$11,000. ZAP Jonway is currently adding to its manufacturing production lines to deliver the A380 EV SUV by the anticipated date of June 2011 and ZAP’s ALIAS EV roadster by September 2011.
“Jonway Automobile’s revenues from selling its gasoline vehicles will help build the foundation for ZAP Jonway’s growth in the electric vehicle market, allowing ZAP to focus on further strengthening its EV technology, reinforced by Jonway’s manufacturing production expertise and ready market access to China,” said Dr. Priscilla Lu, founder and general partner of Cathaya Capital, a Cross Border Fund focused on China. Dr. Lu has served as Chairman of the Board for ZAP since September 2009. Cathaya Capital has invested US$36 million in ZAP since September 2009 with the goal of completing this 51 percent acquisition of Jonway Automobile.
Jonway Automobile is ISO 9000 certified with over 3.6 million square feet of fully provisioned factory space on 141 acres of land.
This press release contains forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of ZAP’s products, increased levels of competition, new products and technological changes, ZAP’s dependence upon third-party suppliers, intellectual property rights and other risks detailed from time to time in the ZAP’s periodic reports filed with the Securities and Exchange Commission.
ZAP Jonway USA
+1-707-525-8658 x 241
ZAP Jonway China
This editorial appeared in the Sacramento Bee in December, but we reprint it here to offer insight into ZAP’s electric vehicle strategy in China over the past 13 years.
With all the irritations between the United States and China, it is worth noting some opportunities for “competitive cooperation.”
The latest agreements signed this month between the United States and China should make U.S. businesses more competitive in selling everything from industrial machinery and telecom devices to equipment for large-scale wind farms.
For example, companies that participate in the construction of wind farms will now be able to participate in projects to install wind farms in China. Until now, they were not able to participate because their non-Chinese experience could not be used for qualification as a bidder on a China-based project. The new commitment by China will allow those companies to gain access.
And as Jennifer Turner of the Wilson Center has said, in many cases, combining the strengths of innovative U.S. technologies and Chinese manufacturing capacity can be an important driver of economic growth and jobs here and in China.
But we have to be looking for commonalities and opportunities. For example, California and China are earthquake prone. China’s going to need to build 30,000 hospitals in the next 10 years. California has a lot of health care companies and a lot of experience building hospitals to meet earthquake standards. That is an exportable skill set.
Here is one small example. California has many of the leading companies and innovators in the electric-vehicle industry.
Santa Rosa-based ZAP Electric Vehicles announced an agreement during Gov. Arnold Schwarzenegger’s September trade mission to China whereby new plug-in vehicle technologies designed in California, combined with China-based manufacturing, will allow ZAP to provide electric charging stations, battery swap-out stations, as well as electric vehicle maintenance and repair depots in Shanghai’s Yangpu District.
Of the five biggest solar plants in China, infrastructure (such as polysilicon production equipment, crystalline ingot growth systems and fusion furnaces) comes from the United States, creating jobs here. Certainly, manufacturing solar panels in China creates jobs in China. But jobs also are created here at the project location.
The picture is much more complex than the “shipping jobs to China” slogan we hear every election season. If we embrace the concept of “cooperative competition” – even as we continue as a nation to seek enforceable agreements against pirating, protectionism and manipulated currency in China – we can take advantage of our strengths to make economic progress during this time of difficult economic transition.