Geely acquires British electric startup Emerald
Updated: 2014-03-04 03:40
By Lyu Chang (China Daily)
Private-sector vehicle producer Zhejiang Geely Holding Group Co confirmed on Monday the acquisition of British electric startup company Emerald Automotive after a year of negotiations, promising investment of at least $200 million over the next five years for development of its vehicles.
"The purchase is part of our technological development of new-energy vehicles," said Li Shufu, founder and chairman. He didn't disclose terms of the transaction, which was finalized on Friday.
Victor Yang, spokesman for Geely, said the purchase is intended to expand the British electric taxi market first.
Activity will then be extended to other countries, including China, which has a fast-growing market for alternative-fuel vehicles.
This isn't Geely's first acquisition in the British market, where demand for new-energy vehicles is outstripping that of other European countries.
Last February, Geely paid $18.5 million for 80 percent of Manganese Bronze Holdings Plc, parent of the maker of London's cabs.
In 2010, Geely paid $1.5 billion for Swedish carmaker Volvo Car Corp.
Li, also a representative to the ongoing Chinese People's Political Consultative Conference, said the mayor of London has welcomed the investment.
The City of London hopes that the Chinese car giant will convert the district's taxis to electric vehicles.
"We have a lot to achieve in the London taxi market," he added.
Emerald, which has developed two prototype electric delivery vans, hasn't yet moved into the commercialization phase. After the acquisition, Geely will help develop these vehicles and take them to the commercial production stage, Yang said.
Geely will retain the workforce of Emerald Automotive to oversee the development of this new technology, a statement by Emerald said.
Geely Group may also use the British company's resources to explore the North American market in the longer term, according to the statement.
Andy Tempest, the chief executive officer of Emerald, said in a statement that the deal will secure the company's long-term future.
He called it a "fantastic opportunity", adding: "We realized that we needed a strategic partner for parts, supply chain and financial resources." Tempest will stay with Emerald.
Emerald, which also has bases in Essex and America, was founded in 2009 to develop lightweight electric vans.
Car giants are battling to grab a share in the alternative-fuel vehicle market amid increasing demand from consumers and businesses under pressure from high fuel costs and emissions regulations.
China's largest car parts maker, Wanxiang Group Corp, agreed last month to pay $149.2 million to buy the remaining assets of the failed US-based luxury hybrid builder Fisker Automotive Inc.
Commenting on the high-profile debut in China of Tesla Motors Inc, Li said: "Tesla does not necessarily represent the future development of the technical route for new-energy vehicles.
"There will be a bumpy road ahead for all electric cars before being tested by the market."