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By M. Marin
Kandi Technologies (NASDAQ:KNDI) is poised to benefit from the new U.S. administration’s goal to increase the government’s fleet of green energy vehicles, we believe. KNDI is one of the few EV manufacturers producing economical cars that are capable of obtaining a relatively long range on a single battery charge. In fact, KNDI’’s recently introduced EV models, the K23 and K27, are among the most affordable on the market. On the consumer side, as of September 30, 2020, the company had received deposits for 700 pre-ordered vehicles and anticipates pre-orders to grow substantially.
KNDI distributes in the U.S. through its Dallas-based wholly-owned subsidiary, SC Autosports. SC Autosports has a national U.S. sales presence and recently began accepting dealer applications to sell Kandi EVs domestically. KNDI is optimistic that its sales in the U.S. can grow over time.
In China, KNDI also intends to focus on the development of its ride-share program and battery swap service. Kandi recently established of a subsidiary focused on operating a ride-sharing service across China, entered into a collaborative alliance in the market and launched several ride-share pilots that also include KNDI’s battery swap feature.
The collaboration has launched pilot programs that include KNDI’s battery swap feature with the delivery of 1,000 EVs to the Hainan province and 2,500 EVs to the Zhejiang province. Ultimately, the collaboration targets operating a fleet of 300,000 EVs, with an initial focus on the pilots that leverage KNDI’s vehicle battery technology.
The ride-share alliance has forged an agreement with the Agricultural Bank of China Hangzhou Branch that will give Kandi access to a line of credit to support the first phase of a program to sell 300k EVs to rideshare services. Last month, KNDI announced a new contract to sell 3,000 model K23s to the ride-sharing alliance.
Given the growing traffic and congestion China faces that, in turn, contributes to its pollution problem, Chinese regulators also look to ride-share as one solution to expand affordable transportation options. China is already the world's largest ride share market, but KNDI management believes the ride-share market remains under-penetrated. KNDI is focused on this high growth sector, with its ride-share program also designed to leverage its battery swapping technology that enables drivers to swap a charge-depleted battery for a fresh one and eliminate the downtime required when the driver needs to stop to recharge the battery. This technology is designed to extend the travel capability and range of the car and eliminate concerns that many drivers have about EVs.
China’s interest in promoting ride sharing and battery swapping technology implies government support and creation of uniform standards that are expected to facilitate the roll-out of battery swapping technology. KNDI recently announced that it has established a wholly-owned subsidiary, China Battery Exchange Technology Co., for its battery swapping services.
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