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February 4, 2021

Ford terminates EV plans with Zotye

Ford has decided to terminate plans to launch electric vehicle joint ventures with China's Zotye Auto.

By Sam Duke

Ford has decided to terminate plans to launch electric vehicle joint ventures with China’s Zotye Auto.

In a statement sent to just-auto, Ford said that it was now impossible to proceed with the Zotye JVs due to changes in the Chinese EV industry and ‘relevant policy’.

The statement said: “Considering significant changes occurred in recent years in China’s pure electric vehicle industry and relevant policy which makes it impossible to implement the BEV JV and the Smart Mobility JV proposed to be jointly established by Ford and Zotye Motor, Ford China has decided to terminate the relevant JV contracts with Zotye Auto.”

It went on: “The rapidly changing EV landscape in China requires fresh thinking. As part of Ford’s China 2.0 Transformation Blueprint, the company will pursue a flexible EV business model creating a center of competence to deliver on – and accelerate – its commitment to introducing a broad range of EVs to China, including plug-in hybrids and all-electrified vehicles, leveraging its global and local relationships and resources.”

The two companies signed a collaboration agreement in late 2017, to jointly invest US$756m in a 50:50 joint venture for the development and production of a range of electric vehicles for the local market. But the partnership failed to get off the ground and Zotye has experienced a number of difficulties in recent years, including poor levels of sales, worries about its financial health and concerns over its product investment capabilities.

The privately held Zhejiang-based company has a reputation for cloning other manufacturers’ vehicles.

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In late 2019, Zotye closed its Traum brand division amid reports of unpaid salaries and closed dealerships.

It had planned to enter the US market. In 2018, Zotye Automobile and HAAH Automotive Holdings announced the creation of a new business unit to handle the sale of an SUV in the US market, but plans were put on hold last year.

Last week, Ford said its China joint venture with Chongqing Changan Automobile Co would start making the all-electric Mustang Mach-E model.

See also: Ford to make Mustang Mach-E in China

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