Dongfeng in tie-up talks to produce electric cars

PUBLISHED : Friday, 19 June, 2009, 12:00am
UPDATED : Friday, 19 June, 2009, 12:00am

Dongfeng Motor Corp said yesterday it was exploring an investment of at least US$30 million to US$40 million with Detroit Electric Holdings to sell electric vehicles on the mainland and in Europe, the latest step in the country's effort to promote green cars.

Hubei-based Dongfeng, the parent of Hong Kong-listed Dongfeng Motor Group, said it had signed an agreement with Detroit Electric, based in Lochem, the Netherlands, to jointly develop, research, market and sell pure electric vehicles on the mainland.

'We're also having talks for other kinds of co-operation,' said Detroit Electric chief executive Albert Lam (right), a car industry veteran who was an executive director of Britain's Lotus Group International.

Mr Lam added that the specifics of the partnership - licensing, joint-venture status and manufacturing - had not yet been determined.

Mainland carmakers are trying to develop technology for pure electric vehicles in keeping with Beijing's goal of commercialising the emission-free vehicles.

The State Council said in January the country would spend up to 10 billion yuan (HK$11.34 billion) developing alternative-fuel vehicles and components over the next three years.

Dongfeng, the third-largest carmaker on the mainland, said last year it would invest 33 billion yuan to develop a range of environment-friendly vehicles by the end of the decade.

The firm has joint ventures with Japan's Nissan Motor Corp and Honda Motor, as well as France's PSA Peugeot, but has yet to produce an electric vehicle.

Detroit Electric has no manufacturing facilities of its own but has expertise in electric cars.

In 1907, Anderson Electric Car made an electric car called the Detroit Electric. After the initial success, with notable buyers such as John Rockefeller and Thomas Edison, it fell out of favour as petrol engine cars grew less expensive.

The company went out of business in 1939.

The name was acquired by Mr Lam, his friends and other investors with the company registered in Hong Kong.

In March, it signed an agreement with Malaysian carmaker Proton in which Detroit Electric would supply the technology for an electric drive system while Proton would provide the car models. Manufacturing would be done in Kuala Lumpur.

'It's indeed not difficult to build infrastructure for pure electric vehicles, as electricity can be found everywhere,' said Mr Lam. 'But the Chinese consumers might take some time to accept new technologies and the concept of environment-friendly vehicles.'

Volkswagen signed a memorandum of understanding for a partnership with Shenzhen-based BYD last month to develop hybrids and electric vehicles powered by lithium batteries.

Nissan signed an agreement with the mainland government in April to help the country develop a battery-charging network to promote electric vehicles.