HK Group announces joint venture to develop eco-friendly engines
Tuesday, Aug 10, 2010
- Friday, Dec 10, 2010
CHINESE AUTOMAKER CONTINUES MARCH TOWARD PRODUCTION IN BALDWIN COUNTY
MOBILE, Ala. -- Hybrid Kinetic Group Ltd., the company proposing an automotive assembly plant near Bay Minette, has created a joint venture with a Chinese company to develop eco-friendly engines.
On Aug. 3, HK Capital, a wholly owned subsidiary of the group, signed a letter of intent with Anhui Jianghuai Automobile Co., Ltd., to invest 2 billion yuan ($295 million) into the joint venture, which will be based in Hefei, about 250 miles west of Shanghai.
The amount each company will invest in the joint venture will be determined in the future, according to the agreement.
"The cooperation, if successful, would in the long run move the group a step further in launching a larger-scale production of automobiles and automotive products," HK Group said in a release.
Under a plan unveiled last year, Hybrid Kinetic Motors, a Pasadena, Calif.-based subsidiary, would start production in Baldwin County in 2013. The cars built there would run mainly on compressed natural gas, backed up by electric batteries and a small gasoline tank.
The company, which needs some $3.4 billion for the project, expects to build 300,000 vehicles each year at the outset, with production rising to 1 million by 2018. Employment could hit at least 5,000, the firm predicts.
But natural-gas-fueled vehicles so far make up only a sliver of the U.S. auto market, and skeptics have questioned HK Motors' ability to deliver on its rosy forecasts. Last month, however, architects unveiled three possible master plans for the proposed Bay Minette factory, which would be built on a 3,000-acre site off Interstate 65.
The joint venture is the second major development for HK this summer. In May, Hybrid Kinetic paid 180 million yuan ($26.4 million) for Zhejiang GBS Energy Co. Ltd. The sale was announced Monday.
Lithium-ion batteries are popular in portable electronics, such as cellular phones, and in hybrid cars because they are lightweight and powerful. Hybrid Kinetic plans to use the batteries for the hybrid vehicles it has proposed to build in Baldwin County.