Corporate News Blog – Ford and Zotye Auto Explore Possibilities of Forming a JV for Manufacturing All-Electric Vehicles in China

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LONDON, UK / ACCESSWIRE / August 24, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Ford Motor Co. (NYSE: F), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=F. The Company announced on August 22, 2017, that it has signed a Memorandum of Understanding (MoU) with Anhui Zotye Automobile Co., Ltd (“Zotye Auto”), a major manufacturer of zero-emission all-electric vehicles in China. The MoU is part of Ford’s global plans of expanding its presence and market share in the electric vehicles segment. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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Commenting on the signing of the MoU with Zotye Auto, Peter Fleet, Ford Group’s Vice President and President of Ford Asia/Pacific, said:

“The potential to launch a new line of all-electric vehicles in the world’s largest auto market is an exciting next step for Ford in China. Electric vehicles will be a big part of the future in China and Ford wants to lead in delivering great solutions to customers.”

Jin ZheYong, Chairman and President of Anhui Zotye Automobile Co., Ltd, added:

“The MoU between Zotye Auto and Ford opens the door for us to explore our cooperation in the development of clean energy vehicles. This presents us with an exciting opportunity to leverage each other’s strengths in achieving a win-win situation for both parties’ growth in the fast-evolving Chinese electric vehicle market.”

Details of the MoU

The main purpose of the MoU is to explore the possibility of forming a 50:50 joint venture (JV) company with Zotye Auto. The JV company would be used for the development, production, marketing and servicing of a new line of all-electric passenger vehicles in China. Ford’s signing of the MoU is in-line with the Company’s vision for a more sustainable auto industry and its efforts to bring about change in the society by improving air quality and addressing climate change. The all-electric vehicles manufactured by the JV would be sold under a local brand owned by the JV. The JV aims to capture a major chunk of the all-electric passenger vehicle market in China. Both Companies plan to share further details of the JV including information on the brand, products, and production volumes at a later date, once a definitive agreement is in place and after receipt of all regulatory approvals.

The JV with Zotye Auto would add to Ford’s existing JV’s in China including Changan Ford and Jiangling Motors Corporation.

Zotye Auto, based in Huangshan, Anhui province of China, is a pioneer in the all-electric vehicle segment and was one of the first automobile manufacturers to produce all-electric passenger vehicles in China. Presently, it is a market leader in China’s all-electric small vehicle segment and has already sold over 16,000 all-electric vehicles as on July 2017. This represents a year-on-year growth rate of 56%.

China is an important market for Ford and is also one of the fastest-growing markets in the world for new energy vehicles (NEVs). According to Ford, the market for NEVs in China is expected to grow to six million units per year by 2025. Out of these approximately 4 million vehicles are expected to be all-electric vehicles.

Ford’s China electrification strategy

Once the JV with Zotye Auto is formed, it would give a major boost to Ford’s ambitious China electrification strategy. In April 2017, Ford had revealed its China electrification strategy wherein it planned to address the growing demand for electric vehicles in China and offer a wide selection of electrified vehicles by 2025 which would include hybrids, plug-in hybrids, and fully battery-powered electric vehicles. Ford plans to launch Mondeo Energi, its first plug-in hybrid model in China in early 2018. Ford’s Mondeo Energi would be manufactured by the Changan Ford JV.

By 2025, Ford expects that nearly 70% of its vehicle models will have electrified powertrain options, including the vehicle range produced by Changan Ford. Additionally, Ford plans to manufacture electrified powertrains in China by 2020.

Till date, Ford has invested over $4.5 billion globally for manufacturing electric vehicles as a part of its global electrification commitment. The Company plans to launch 13 new electrified vehicles globally within the next five years. The new electric vehicle models would include the all-electric small SUV to be sold in Asia, North America, and Europe.

Last Close Stock Review

At the close of trading session on Wednesday, August 23, 2017, Ford Motor’s stock price rose slightly by 0.56% to end the day at $10.71. A total volume of 35.40 million shares were exchanged during the session. The Company’s shares are trading at a PE ratio of 11.27 and have a dividend yield of 5.60%. At Wednesday’s closing price, the stock’s net capitalization stands at $42.86 billion.

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