Dongfeng Motor Corporation and Detroit Electric Holdings have announced plans to jointly research, develop, market and sell pure electric vehicles (PEVs) in China, based on Detroit Electric's electric drive technology.

A joint statement said "Dongfeng would test and validate Detroit Electric's patented electric drive technology with the intention to produce and market Dongfeng's Pure Electric Vehicles".

"In order to accelerate the adoption of Detroit Electric's electric drive technology and propel the PEV industry forward, Detroit Electric and Dongfeng will enter into discussions to form a joint venture company to manufacture, assemble, produce and supply the electric drive technology to Dongfeng group and other vehicle manufacturers," the statement added.

The two companies also said they would study and explore the market entry strategy for the Dongfeng-Detroit Electric brand.

Detroit Electric chairman and CEO Albert Lam said the test and validation period would be concluded this October, and that the licensing agreement would include the motor drive and its controller, battery packs, battery controller, and other integration software and hardware.

Lam said Dongfeng had conducted a global review of available technology to power its PEVs, and decided to validate Detroit Electric's system because of its technological advancement.

Lam added that Detroit Electric's discussions to form a joint venture company with Dongfeng, to manufacture, assemble, produce and supply its system to Dongfeng group and other vehicle manufacturers in that country "will propel the electric vehicle industry forward within China".

In March, Detroit Electric signed licensing and contract assembly agreements with Malaysia's Proton to mass produce pure electric vehicles based on two vehicle platforms and the US firm's electric drive systems.

Detroit Electric targets to sell 45,000 of these vehicles across Europe, the US and Asia by next year; increasing to 270,000 by 2012.

Lam said: "Proton will also benefit from our deal with Dongfeng, as Detroit Electric-badged vehicles based on Proton vehicle platforms will be distributed in China through Dongfeng's extensive network of 400 domestic dealers. This will indirectly open up another sales channel in the China market for Proton."

He said China was committed to alternative clean vehicles and, with financial and other incentives to encourage the adoption of zero emission vehicles, the country would become one of the most important markets for Detroit Electric growth over the next five years.

Lam said the Chinese government was strongly encouraging the development of electric and hybrid vehicles as a way to address the substantial air pollution problem in urban areas.

"In 13 cities, taxi fleets and government customers can receive a subsidy of more than US$8,000 toward the purchase of a hybrid or pure electric vehicle.  Charging stations have also been mandated in Beijing, Shanghai and Tianjin.

"Hence, this development augurs well for Detroit Electric's plan to become the world's leading electric vehicle producer and supplier of electric vehicle technology," Lam said.