The major customers for the wireless charging system – known as Plugless Power, – are Chinese automakers and the target product was passenger cars. US based Evatran had just announced an investment from Zhejiang VIE Science and Technology Co, a Chinese supplier for majority of Chinese EV (electric vehicles) producers. The system requires automakers to to produce electric vehicles with wireless charging technology installed. So the part of the plan it to use the VIE connection to convince automakers to begin producing electric vehicles that can be charged wirelessly.
The system is supposed to solve the insufficient infrastructure for EV charging. Evatran, the US maker of the Plugless Power wireless charging system for electric vehicles is vigorously targeting China.
The relationship between VIE and Evatran continues to grow; The most recent investment of $2.3 million occurred in July, and it was the final tranche of the $5.5 million initial investment by VIE in the U.S. Evatran entity. The two earlier tranches, or $1.6 million each, occurred in mid- and late-2015.
Evatran plans to overall take on China’s electric vehicle market. However, it goes through joint-venture –JV – set up n Hong Kong. Evatran and VIE will invest $5 million in the China-based, Hong Kong-registered joint venture. Evatran’s portion will consist of a limited amount of capital plus assignment of intellectual property, as well as technical and engineering support, Evatran will have a 25 percent ownership stake in the JV.
The case discussed is a spectacular example of joining Chinese investing capital, American technology and knowhow together with business friendly environment and favorable location in Hong Kong. It is also entrenched in many ambitious projects of China, just to mention go global, innovate, environment protection etc.
It becomes important since China became the biggest in the world market for EVs.with strong support (including subsidies) from the government. Last year alone China spent over 90 billion yuan in subsidies into the industry, which it calls “strategic”. The government gives out generous subsidies to local makers of EVs, to parts suppliers and to those who buy the final products. Privileged Chinese firms also benefit from friendly procurement contracts, such as one that the government of Shenzhen, a southern city, handed out this week to BYD, a big EV manufacturer based there, for hundreds of electric buses. It could be worth 1.5 billion yuan ($227m).
The government is encouraging Chinese firms, including the country’s tech giants, to innovate in the field. Tencent, a gaming and social media firm, is developing internet-connected EVs with Taiwan’s Foxconn. Alibaba, an e-commerce firm, is providing data and cloud-computing services to Kandi Technologies, a local EV-maker that is popularizing the sharing of the vehicles.
One smaller upstart is NextEV, which is backed by Sequoia Capital, a Californian venture fund. It is in the midst of raising $1 billion and plans to launch a Chinese-backed sports car this year to challenge Tesla.
Some accuse China for unfair protectionism. Using certificate regulations, it denied recently battery certifications to South Korea’s LG and Samsung. Willing stay in the market, Samsung is ready spend 3 billion Yuan on a stake in BYD one of major EV maker.
China became the world’s biggest market for EV (see above). The category includes electric-only cars as well as plug-in hybrids that can also run on petrol. There are expectations that the market to grow by nearly 50% a year for the rest of this decade.