Ford finalized a deal with Chinese automaker Zotye Auto to build electric cars in China. The joint venture helps Ford prepare for stricter emissions standards in China, the world's largest new car market.
The deal, worth $756 million, will establish a new corporate entity called Zotye Ford Automobile Co. Ltd. Ownership will be split 50-50 between Ford and Zotye, and the joint venture will build and sell electric cars in China under a distinct brand name. Zotye Ford plans to build a new factory in China's Zhejiang Province, and establish its own dealer network.
Zotye is primarily known for selling cars that look awfully similar to Western cars, such as the SR9, a copy of the Porsche Macan. But Ford notes that the company sold 22,500 all-electric vehicles in its home market between January and October. Government regulations typically require foreign automakers to partner with local firms in order to manufacture cars in China.
Ford has ambitious electrification plans for China. By 2025, it expects 70 percent of Ford-branded vehicles sold in the country to have all-electric or hybrid powertrain options. This is likely a response to stricter regulations that will take effect in 2019. The new rules require automakers to amass credits for so-called "new energy vehicles," including battery-electric cars, plug-in hybrids, and hydrogen fuel cell vehicles. China is also reportedly mulling an outright ban on sales of new gasoline and diesel cars.
Meanwhile, Ford is also investing more heavily in electrified vehicles for the U.S. market. Over the next few years, the Blue Oval will launch an electric SUV with a range of at least 300 miles, as well as hybrid versions of the Mustang and F-150. Ford is also said to have formed a dedicated group called "Team Edison" to expedite electric-car development.