Recently, Geely Automobile announced that it will establish a joint venture with Lifan Technology. The joint venture will have a registered capital of 600 million yuan, with each party contributing 300 million yuan in cash and holding 50% of the shares respectively.
According to the announcement, the joint venture will mainly engage in:
(1) Design, research and development, and sales of automobiles (including equipment for accessories, parts processing, and automobile decoration);
(2) Import and export of goods, agency import and export, and technology import and export;
(3) Software development, technology development, technology services, technology consultation, and technology transfer.
Geely stated that the establishment of the joint venture is based on the principles of “complementary advantages, mutual support, long-term cooperation, and common development”. Its ultimate goal is to promote the transformation and upgrading of Lifan Technology’s automobile industry through research and development, sales, and operation of automobiles (including but not limited to swappable-battery cars), and thus rapidly increase its overall market share in the passenger car market. At the same time, the establishment of the joint venture can continue to promote the upward development of the Geely brand, and through the combination of various brands, form a complete coverage of different levels of the mainstream market.
In 2016, due to the scandal of cheating on subsidies, Lifan’s sales of new energy vehicles plummeted more than 60%. After finally rebuilding its sales, Lifan’s vehicle quality problems appeared again. After experiencing the “spontaneous combustion” problem, Lifan’s sales continued to decline from tens of thousands per year to only 282 vehicles in 2020.
Later, due to debt pressure, Lifan announced bankruptcy restructuring. Since Geely entered Lifan Technology, the main business of Lifan Technology has been to produce and sell Geely’s swappable-battery car, Maple Leaf. As of the date of the announcement, Geely Technology holds about 28.98% of Lifan Technology’s shares.
On January 26, 2021, Lifan Technology (Group) Co., Ltd. was unveiled, and Geely Technology Group’s first swappable-battery new car model was introduced. In May 2021, Lifan Technology’s first swappable-battery car model, “Maple Leaf 80V”, was officially launched, and its procurement intention was confirmed with platforms such as Caocao from Geely Automobile.
After six months of silence and turbulence, on September 22, Lifan finally delivered the first batch of one hundred swappable-battery rental cars. With the help of Geely, Lifan Technology’s sales from September to November this year were 200, 523, and 1,140 vehicles, respectively, returning to rapid growth.
According to the plan, Lifan Technology will launch two battery-swapping models, the 60S and 80X, this year. The 60S will be a battery-swapping sedan for the taxi market, while the 80X will be a large battery-swapping SUV mainly aimed at government fleet customers. However, with the end of the year approaching, we have yet to see more information about these two vehicles.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.