Smith Electric Vehicles Corp. signed a letter of intent with commercial vehicles manufacturer Wanxiang Group to manufacture and sell all-electric school buses in China. The deal could be worth up to $100 million.
Last October, Smith teamed with Trans Tech Bus to unveil the all-electric eTrans Type at the NAPT Summit in Cincinnati. The latest deal, which was finalized on Feb. 17 in Los Angeles at the U.S.-China Economic and Trade Cooperation Forum, which featured meetings between U.S. and China business leaders and a state visit by Chinese Vice President XI Jinping. The deal includes an initial $25 million equity investment by Wanxiang for Smith to begin work and up an investment of up to $75 million between the two companies.
Smith said its platform vehicle designs will be coupled with Wanxiang’s electric-vehicle components to develop other electric commercial vehicles in addition to electric school buses. The Chinese government has called for increased school bus safety standards since the November crash of school van crash in China’s Gansu province killed 21 schoolchildren and injure 41 others. The 62 kindergartners were crammed into a nine-passenger van.
Smith added that the investment and the joint venture are subject to the execution of definitive agreements and receipt of regulatory and other third party approvals.
“Wanxiang’s high quality precision manufacturing capabilities and purchasing relationships bring significant value to our business in our current stage of development,” commented Bryan Hansel, chief executive officer and chairman of Smith. “Wanxiang is one of China’s most respected companies and we look forward to a long, mutually beneficial relationship that advances the global commercial electric vehicle industry.”
“Smith’s market leadership in the U.S. and Europe bring valuable experience and technology to address the significant opportunity for all-electric commercial vehicles in China,” added Pingyi Li,executive director of Wanxiang EV Co. Ltd. “Working together, we see tremendous opportunity to serve this growing market and to leverage volume and cost synergies back into Smith’s global business. We are pleased to have them as our partner.”
