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BIZCHINA> Cars
Foton JV taps new energy
By Liu Yiyu (China Daily)
Updated: 2009-10-27 08:38

Beiqi Foton Motors Co, China's largest commercial vehicle maker, will tap the new energy auto market by setting up a joint venture to develop and produce vehicle batteries, the company said yesterday in a statement.

The vehicle battery technology firm has been co-founded by Foton Motors, its parent company Beijing Automotive Industry Holding Co (BAIC), Pulead Technology Industry Co and a Dongguan-based technology firm.

Foton and BAIC are investing 10 million ($1.46 million) and 24 million yuan while the other two technology firms are investing 41 and 25 million yuan, respectively.

The new firm, aiming to be China's largest lithium battery producer, will work on the design, research and development, manufacture and distribution of power cells, Foton said in the statement.

Foton said it would devote more effort to new energy vehicles and benefit from the technology of a stable power battery system that could be used in its new energy commercial vehicles.

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"Foton, along with many other new entrants, wants to take a place in the emerging market and making profits is not their top priority now," said auto industry analyst Zhu Xuedong of Industrial Securities.

"New energy cars may not be widely accepted in the market in the short run unless their prices are competitive."

Electric vehicles will finally dominate the new energy auto industry, the analyst added.

Foton's move comes after a series of global efforts to develop new energy vehicles. Adding to the fever is a recent pickup in global oil prices, pushing up the need for renewable energy, the analyst said.

Overcapacity, however, is likely to plague the fledging industry. Lithium-ion capacity will reach 2 billion watt hours by 2009, far exceeding the needs for making power batteries, China Securities Journal reported.


(For more biz stories, please visit Industries)
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