Cathaya Capital LP is investing $11 million into ZAP, a 15-year old California electric vehicle (EV) company. The money will be used to help finance the 51 percent majority interest, $29 million acquisition of Zhejiang Jonway Automobile Company Ltd. The new company combines ZAP’s experience in electric vehicles with Jonway’s quality auto manufacturing capabilities in China.
The merged company will be able to accelerate cost-effective manufacturing of ZAP’s electric vehicles and gives ZAP access to China’s rapidly growing auto market through Jonway’s distribution channels of 80 factory-direct dealerships that feed into hundreds of factory-authorized dealers. With Jonway’s capabilities of producing up to 30,000 vehicles a month, ZAP believes it can become an international leader in electric vehicles.
Another aspect of the deal is China’s commitment to reduce pollution and putting incentives in place to encourage adoption of energy-efficient technologies like electric vehicles. Cathaya invested in ZAP last year with the objective of realizing these opportunities. Cathaya believes the new ZAP is well-positioned to address this ’stimulated’ market.
The chairman of the board of ZAP is Dr. Priscilla Lu, a 30-year international technology and manufacturing veteran. Dr. Lu spoke about the merged company, “Together these two companies with their complementary strengths form a new company reinforced by EV technology, mass production manufacturing skills, a strong sales presence in China, and access to international markets.”
According to Dr. Lu, the new company will be “focused on delivering revenues and profits while expanding international market presence with quality products aimed at addressing new market demands for alternative energy vehicles.”