At least three defunct Chinese electric vehicle makers are getting a new lease on life after the industry was touted as a “new productive force” — a slogan coined by President Xi Jinping to promote the development of advanced technology.
Zhidou Electric Vehicles Co., a maker of micro cars that went bankrupt in 2019, said it’s completed a restructuring with the help of Aima Technology Group Co. and automaker Zhejiang Geely Holding Group Co. It has resumed production and will launch a new EV called Zhidou Rainbow in April, according to a March 7 post on its official Wechat account.
Haima Automobile Co., which has been losing money amid poor sales for years, in January transferred its management and assets to an entity backed by the Zhengzhou municipal government in central China, where the carmaker has a factory producing the EX00 electric minivan.
Aiways Automobile Co., which halted production and stopped paying its workers mid-last year, was reported to have received funding this year and is working to resume production, according to local media reports. The brand will focus on exports rather than the domestic market, the reports said.
“New productive force” became a buzzword during this year’s National People’s Congress — and was defined by state news agency Xinhua as high efficiency and high quality production that’s mainly driven by technological innovation, in contrast to conventional production that relies on large amounts of investment.
The term popped up in the resurrection of both Zhidou and Haima. Ren Zhenhe, the governor of Gansu province, where the Zhidou factory is located, visited the plant Tuesday, and said he was happy with the start of output and hoped the automaker can develop rapidly to enhance “new productive forces,” according to a post by the company.
Meantime, the government of Zhengzhou — the new home of Haima Auto — said it’s building up its “new productive forces,” with one being the creation of an EV manufacturing base with a goal of reaching annual production capacity of 1.4 million cars.
The revival of the trio of zombie EV makers is a risky bet in China’s crowded, hyper-competitive auto market. Only a third of the top dozen manufacturers hit their sales target last year, and the industry has been embroiled in a bruising price war that has shrunk markets. The government has also sent mixed messages, with a senior official earlier this year criticizing local authorities for excessive investments in the EV industry.
One danger for any new local-government backers is whether EV makers that are resurrected ultimately become another drag on municipal finances.
