Ford and China’s Anhui Zotye Automobile Co. Ltd. signed a memorandum of understanding to build electric cars in China. The document calls for the creation of a 50/50 joint venture to manufacture electric cars in the world’s largest new car market, and sell them under a Chinese brand name.
The move shows Ford’s commitment to both the Chinese market and electric vehicles. In a press release, the Blue Oval said it expects the market for so-called “new energy vehicles” in China will reach 6 million units annually by 2025, including 4 million all-electric cars. (“New energy vehicles” is a term coined by the Chinese government that includes all-electric cars, plug-in hybrids, and hydrogen fuel-cell vehicles.)
The Chinese government began incentivizing new energy vehicles several years ago to combat horrific air pollution, but sales have only really picked up over the past couple of years. A large chunk of the those sales have been plug-in hybrids that, due to China’s limited charging infrastructure, may not get plugged in very often, or small electric vehicles with limited range.
Ford already had plans to expand sales of electrified cars, but the joint venture with Zotye Auto demonstrates a stronger commitment to those plans. In April, Ford said it that by 2025 it would offer hybrid or all-electric versions of every model built in China, according to Reuters. But the automaker also said it would take a cautious approach, owing to uncertain consumer demand and potential shifts in government policy.
Zotye is described by Ford as the “market leader” in Chinese electric-vehicle sales. The company sold more than 16,000 all-electric vehicles through July, representing 56 percent year-over-year sales growth, according to Ford. Further details on the joint venture will be released at a later date, pending final negotiations and regulator approval.
Meanwhile, Ford plans to launch an electric SUV with a 300-mile range in the United States, along with a gaggle of new hybrids. The automaker is also working with DHL in Germany on electric delivery vans. It’s a major change for a company that hasn’t shown much interest in all-electric cars, until recently. Ford’s only current all-electric model is the unloved Focus Electric, which only sells in small volumes.