IN FOCUS: KANDI TECHNOLOGIES GROUP INC. (NASDAQ: KNDI), ITS GROWTH OPPORTUNITIES: SMALLER CITY RIDE SHARING PLATFORM AND FLEET SALESThe alphaDIRECT Insight
Kandi Technologies positions itself as one of the pioneers of the EV industry in China. Kandi introduced its first EV in 2007 and now produces EVs through a joint venture with Geely, China’s largest and fastest growing non-state-owned automaker. The company is also leveraging its business model to other high growth areas including ride sharing. The company expects that the ride sharing market in China is poised for significant growth in the coming years with China already being home to the world’s largest ride-hailing market, estimated by consulting firm Bain & Co to be worth $23 billion. Despite the recent pandemic the consulting firm expects growth to return in the 10% to 15% range in 2021. The ride-sharing alliance involves three parties: Kandi, Jinpeng and Ruibo. What is interesting about the alliance is that it will utilize a Quick Batter Exchange infrastructure in order to maximize the road time of the vehicles and lower the cost to operate the vehicle. Kandi will be a primary vehicle supplier of EVs to the venture. In this Management Series we review the opportunity and drivers of this market and how Kandi intends to utilize this venture as another growth driver for new vehicles in the China market.
Shawn Severson: Good Afternoon, Mr. Xiaoming Hu, and thank you for taking the time to speak with us again today. The last time we spoke, we addressed general topics about Kandi, including your products, future growth plans and competition. Today our focus will be on your EV ride-sharing alliance and how it can drive growth. Last time, you mentioned that the ride-sharing program is one of Kandi’s most exciting business opportunities. As the primary vehicle supplier to the alliance, you hope to supply 300,000 government accredited EVs to alliance members within five years. As a three-party partnership, can you give us a little bit more color about the role of the other two partners, Jinpeng and Ruibo?
Hu Xiaoming: Thanks, Shawn. It is great to be back. As you stated, the ride-sharing alliance involves three parties: Kandi, Jinpeng and Ruibo. Ruibo is currently the largest ride-sharing company in China that has Quick Battery Exchange infrastructure and they have received a ride-sharing service platform license from the government. Ruibo will operate the ride-share project. Meanwhile, Jinpeng will use its dealer resources to expand the alliance. Jinpeng has more than 2,000 dealers in third- and fourth-tier cities, which is an extensive dealer network. As one of the EV pioneers in China, Kandi will be the primary vehicle supplier to the program.