SF Motors has become the latest Chinese-owned company to unveil plans to break into the US electric vehicle market, at a time when a growing tech threat from China has rattled Washington.
The push by China’s EV companies comes in the face of US unease about Chinese leadership in the next big technology markets. That contributed to the White House’s decision last week to impose higher tariffs on some Chinese imports, and to threaten retaliation over the pressure American companies have faced to give up their technology to their Chinese counterparts.
Earlier this month, Tesla boss Elon Musk complained that his company was not allowed to own its own assembly plants outright in China, while there are “five 100 [per cent] China-owned EV companies in the US”. He also pointed to the 25 per cent tariff on Tesla cars exported to China, 10 times the levy on vehicles moving in the opposite direction.
John Zhang, chief executive of SF Motors, a subsidiary of Chinese automaker Sokon Industry Group, claimed his company was on an equal footing with Tesla in the US, removing the risk of retaliation from Washington.
“So far we think we should be all right [as] some of our manufacturing and servicing is in the US,” Mr Zhang said just before SF Motors’ unveiling late on Wednesday of two electric vehicles it plans to launch in the US. The first, a mid-range crossover SUV, is due to go into trial production before the end of this year.
The Chinese-owned company has acquired a plant in Indiana, and claims to be the only EV maker with its own assembly facilities in both China and the US. The heavily automated plant is set to bring “a few hundred” jobs to Indiana, Mr Zhang said. SF Motors follows other Chinese-owned electric carmakers to base their US operations in Silicon Valley, including Nio and Byton.
SF Motors is set to benefit from a protected home market that promises to give it much better economies of scale than US competitors. China is already the world’s largest EV market, a lead that is projected to grow.
Mr Zhang said his company was counting on its “global business model” to give it an edge, leading to lower unit costs and enabling it to set its prices below other electric vehicle companies. “We designed the product for the global market,” he said.
The company plans to produce and launch its first vehicles on the US west coast, where much of the current demand is centred. Its US assembly facility has a capacity of 50,000 vehicles a year but its plant in China can make three times that number, said Mr Zhang. At peak capacity, that points to a global production volume roughly twice what Tesla achieved last year.
The spectre of Chinese competition has led to increasing scrutiny in Washington of the acquisition of important US technology. Mr Zhang said his company had developed the electric power train for its vehicles entirely in-house. It is looking for partnerships in the US to develop autonomous driving capabilities, he said, a feature it hopes to start adding to its cars in 2020.
SF Motors has also acquired American technology outright, with last year’s purchase of an electric car start-up established by Martin Eberhard, a co-founder of Tesla. The company, InEVit, “developed and patented a unique EV chassis architecture, battery module design innovations and manufacturing techniques”, SF Motors said at the time.
SF Motors has set up its headquarters in Santa Clara, about 72 kilometres south-east of San Francisco. Mr Zhang said the company picked the brand name before realising its US base was so far from the city it is named after.
Source: ft.com
