According to the terms of the definitive agreement, ZAP has the right to acquire the remaining 49% of Jonway Auto at the same valuation by March 30, 2011 or at a then current valuation after that date.
The JV will allow cost-effective manufacturing of ZAP's electric vehicles and gives ZAP access to the Chinese market through Jonway's distribution channels.
Jonway Automobile, with approximately 800 employees, is currently manufacturing approximately 1,000 vehicles per month and has a capacity to produce up to 30,000 vehicles per year at its 3.6 million square foot plant in Sanmen.
"As originally planned when I joined ZAP in connection with the Cathaya Funds' investment in the company, the Jonway transaction was formulated to give ZAP the complementary facilities and automotive manufacturing expertise to position itself as a worldwide EV and automobile manufacturer,” Priscilla Lu, ZAP Board Chairman, said in a release.
“Jonway's management continues to lead and expand its product line of traditional vehicles and will begin to build the production line for ZAP's EVs in the coming quarters. ZAP will enhance its operations management team to focus on delivering the opportunities at hand," Lu added.
Earlier this year, ZAP integrated electric drive systems into several Jonway vehicles, while Jonway has agreed to produce the ZAP Alias electric car. In addition to the Alias, Jonway is ZAP's manufacturing partner for its SUV electric taxi based on Jonway's A380 SUV and is launching production for the Chinese market with volume delivery this year.
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