ZAP Jonway Gets $10 Million In Funds To Assist In Building 11,000 Electric Minivans
In an odd twist, the CEO of ZAP and Jonway, Wang Gang, arranged to privately fund a significant portion of ZAP/Jonway’s electric minivan program.
Gang will provide up to $10 million to fund the program:
“Wang Gang (Alex), seeing the time urgency expressed by the purchasers, recently rounded up funding for US$8.5 million for Jonway Auto and plans to fund an additional US$1.5 million specifically to enhance the working capital for the delivery of these orders as well as recent orders placed by new dealers with Jonway Auto for its SUVs. This funding from Wang comes in as equity investment into ZAP, and partly repays the loans that ZAP has with Jonway Auto from the funding made here, and the balance will remain as long term loans that Jonway Auto borrowed from ZAP to support the working capital funds to meet the delivery of these EV orders.”
All told, some 11,000 electric minivans have already reportedly been ordered:
“Wang Gang (Alex), the Co-CEO of ZAP and CEO of Jonway Auto funds ZAP and Jonway Auto to provide additional working capital to meet current Electrical Vehicle (EV) orders in the pipeline. There is urgency to deliver the orders placed by Dong Feng Motor Corporation (www.dfmc.com.cn), working through their partners, Shi Kong based in Hangzhou, Zhejiang Province for 5,000 of Jonway Auto’s EV minivans and 6,000 orders of Jonway Auto’s EV minivans from Holley Metering (http://holleymeter.en.made-in-china.com). These orders were placed last quarter with down payments for initial deliveries expected in this quarter, with expectations to complete all of the deliveries before Chinese New Year early 2016. Due to the increase need in working capital from the large EV orders, ZAP and Jonway Auto have been seeking the funds to support the working capital to fulfill these orders.”
Additional information from press release below:
The funding will provide the working capital to support of one month turnover in production of about 500 EVs of minivans or SUVs initially. However, the objective is to be able to increase the turnover rate in the next few months and be able to bring this number to target production for 1000 EVs per month before the end of the year. ZAP and Jonway Auto continues to seek working capital to fund the volume orders with the objective of being able to deliver several thousand orders by the end of the year.
Jonway Auto’s lithium battery EV minivan which targets China’s city logistic delivery market is especially in demand for city deliveries in dense cities, where daily range is no more than 200km in stop and go traffic. ZAP and Jonway Auto’s EV minivan is one of the first China type approved EV delivery vans priced competitively at just over US$20,000. With the central and major city governments’ rebates, which will remain in place, albeit tapered down over time through 2020, these EV lithium battery delivery minivans are popular for small industries and competes well with the price of gasoline versions of the same type of vehicles.
Wang’s injection of capital to support the manufacturing production as well as on-going funding from Cathaya Management, a management company affiliated with Cathaya Capital, to support critical operational expenses of ZAP and Jonway Auto, the two largest shareholders of ZAP and Jonway Auto are providing much needed financial support to meet the large EV fleet market opportunities in China.