The owner of Karma Automotive is planning to produce electric cars in China, becoming the latest company to flag ambitions to build new-energy vehicles in the world’s largest auto market.
Wanxiang Group, founded by Chinese billionaire Lu Guanqiu, plans to build an electric vehicle plant in Hangzhou, China, according to the company’s application for an environmental impact review posted on its website. The investment value for the proposed project will be 2.5 billion yuan ($375 million) and the factory will have capacity to manufacture 50,000 cars a year.
Wanxiang Group bought the bankrupt Fisker Automotive Inc. and has provided the financial backing to restart the company as Karma, the name of its plug-in sports sedan bought by the likes of Justin Bieber and Leonardo DiCaprio. Karma is trying to reboot its image after Fisker failed to repay $139 million in U.S. government loans and filed for Chapter 11.
Wanxiang plans to mainly produce cars on the Karma platform at the China plant, including extended-range versions of the Karma and Atlantic models, according to the application. Out of the 50,000 cars a year in capacity, 39,000 have been earmarked for the two-door Atlantic, which has a top speed of 135 mph and can get to 62 mph in 6.5 seconds.
More than 200 Chinese companies — with backers including Terry Gou, Ma Huateng, Jack Ma and Jia Yueting — are developing 4,000 new-energy vehicle models and unveiling prototypes at motor shows and home-electronics expos. Traditional automakers and a bevy of startups see opportunity in the government’s commitment to boost yearly sales of new-energy vehicles by a factor of 10 in the next decade.
China said last year it will issue new production licenses to non-automakers, paving the way for Wanxiang to expand beyond making components. Wanxiang has been widely seen as one of the potential candidates for the special permit, given its expertise in producing major car parts and purchase of Fisker and battery supplier A123 Systems. To qualify for the license, companies need to have both experience in product development and manufacturing.
Clearing the environmental review is one of the steps companies have to satisfy before they can build a factory in China. Wanxiang Group didn’t immediately comment on the plan. A representative for Zhejiang Environmental Protection Bureau said the project hasn’t yet been approved.
Wanxiang Qianchao Co., a publicly traded unit of Wanxiang Group, rose 2.8 percent to 15.30 yuan at the close of Shenzhen trading, its biggest gain since June 15. The benchmark Shanghai Composite rose 0.9 percent.