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Geely Takes Over Leopard Automobile Changsha Plant to Boost NEV Production
COVID-19 and China
Geely's first and only fully electric sedan. Image credit: Geely official website

According to Auto-times, on Aril 27, Geely Auto Group, one of China’s leading automobile manufacturer, signed a strategic agreement with Hunan and Changsha’s local government bodies to take over Leopard Automobile’s Changsha Plant to produce and sell NEV’s.

The state-owned Leopard automobile has been going through a turbulent period since 2018 mainly due to the slowing down of china’s auto industry and difficulties in production and operation. 

By taking over the plant, Geely can utilize the land, technology and employees to build a manufacturing base for its NEV’s. The automobile industry in Hunan is mature with a fairly solid development foundation and a perfect industrial chain. The province is an important location for the company’s strategic development. 

Talking about the agreement, the chairman of Geely Auto Group, Li Shufu said, “We will actively help Leopard Auto to get rid of difficulties as soon as possible and develop the NEV industry in Hunan.”

The Chinese automobile market is gradually getting back to normal after suffering from the pandemic. With 1.42 million units produced and 1.43 million sold in March, the decline in production and sales narrowed. The numbers were up by 399.2% and 361.4% compared to the month before. According to the China Association of Automobile Manufacturers during the same period, the production and sales of NEV’s (excluding Tesla) were 50,000 and 53,000 vehicles, up by 402.46% and 310.60% respectively, compared to February. Speaking of Tesla, for March it sold 10,160 NEVs in China, an increase of 160.51% from last month. NIO, another Chinese NEV startup, delivered 1,533 vehicles, up by 116.8% and 11.7% than February 2020 and March 2019 respectively. 

In a related article published recently by EqualOcean, the overall NEV subsidy was cut by 10%, 20% and 30% year-over-year for 2020, 2021, and 2022 respectively. Vehicles that do not meet the 2020 requirement will be entitled to a 50% discount of the 2019 subsidy during the transition period (April 23, 2020 - July 22, 2020), and those meeting the 2020 requirement will get the full subsidy in 2020. The requirement of battery density in 2020 remains unchanged, but the minimum range was lifted from 250km to 300km. 

The move by Geely shows that it is ready to focus its attention on the production of its NEV’s. This implies that the competition within the country is getting tougher. 

Tesla’s competitor Xpeng yesterday released its newest model, the P7, which has a lower price tag and a higher range than Tesla’s Model 3. These companies focus purely on NEV’s whereas Geely is known for its combustion engine cars. To compete in the market, Geely will have to put more resources in its NEV department. 

Editor: Edward Turkson
ANALYST
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