Ford’s plan to build small electric passenger vehicles with Zotye under a 50-50 joint venture in China was announced in 2017. A year later, the two companies deepened their ties by signing a memorandum of understanding for another venture that would produce electric cars for a ride-hailing fleet. But little progress has been made since then.
Ford blamed the scrapping of the plan on changes in China’s electric vehicle industry and government policies, but it did not specify what changes led to its move, according to Reuters.
The news comes days after Zotye released its 2020 earnings preannouncement predicting its net loss will reach between 6 billion yuan ($927 million) and 9 billion yuan for the year, compared with a massive 11.2 billion yuan loss in 2019. The forecast represents a sharp reversal from the company’s 800 million yuan profit for 2018.
Zotye, which is now on the cusp of being delisted from the Shenzhen Stock Exchange after its auditor published a “disclaimer of opinion” due to its inability to evaluate its financial statements in 2019, said that its manufacturing bases have suspended or partially suspended production due to a cash crunch, according to the preannouncement.
Ford said in a statement on Thursday that it will pursue a more “flexible business model in China” that would see it use its existing operations in the country and elsewhere, and build related business centers.
In the past year, Nio, Xpeng and Li Auto, the three well-known U.S.-listed Chinese electric vehicle upstarts, rose to fame due to their record-high sales of cars powered by smart driving technologies.
