Established in 2013, Kandi Technologies Group Inc. (NASDAQ: KNDI) is a Chinese electric vehicle and battery pack manufacturer. Headquartered in Jinhua City, the company was initially formed as a joint venture with car giant Geely Auto to focus on the research, development and production of electric vehicles in the Chinese mainland.
Having received approval from the U.S. National Highway Traffic Safety Administration to import two of its electric car models to the United States in early 2019, Kandi announced that it would be launching its electric vehicles for sale in the U.S. in late-July 2020.
SC Autosports LLC and Kandi America
Kandi Technologies acquired SC Autosports LLC, a Texas-based licensed automobile dealership business, in 2018 to be the exclusive U.S. distributor for its range of electric vehicles. With SC Autosports LLC now operating under the Kandi America brand and following the launch of its two initial EV models in the U.S. market in early August 2020, the company has been seeking to partner with dealerships across the U.S. Additionally, the company has been setting its sights on furthering its international expansion efforts by entertaining distribution inquiries from around the world, including Canada, Brazil, Mexico, India, Romania, Bulgaria, Australia and Ecuador.
“The large amount of inquiries we have received since announcing our U.S. market launch last week is very exciting. We have already fielded substantial interest from dealers and started to review their qualifications,” Kandi America CEO Johnny Tai stated in a news release (http://nnw.fm/mxsjr). “The overwhelmingly positive response we have received thus far underscores U.S. consumers’ increasing appetite for an affordable electric vehicle option. In fact, many have asked to reserve a Kandi prior to the launch.”
The Kandi K27 and K23 Electric Vehicles
Kandi America has launched in the U.S. market with the stated aim to “make electric cars accessible to all.” The company recently launched its U.S. sales efforts through the introduction of its K27 and K23 EV models.
The Kandi K27 is a compact vehicle with a 17.69 kWh battery pack, which limits the vehicle’s range to approximately 100 miles. The car will go on sale at a price of $20,499, which will be reduced to $12,999 following the application of federal tax credits. In certain states, buyers will be able to take advantage of further EV tax incentives, which will serve to lower the vehicle’s price to approximately $10,000 – making it the most affordable compact EV on the U.S. market today.
The Kandi K23 is the larger counterpart to the K27, yet it still qualifies as a compact car within the U.S. auto market. With a larger 41.4 kWh battery pack that will give it an extended range of up to 180 miles, the vehicle will be priced at $29,999 – a cost which will be reduced to close to $20,000 following the application of federal EV incentives. That would put it in the same price bracket as competitor vehicles with far lower operational capabilities, significantly boosting the Kandi K23’s comparative appeal.
Compact Cars Sales as Part of Total EV Market
Compact cars accounted for 9.7% of total U.S. car sales in 2019 and 35% of the total U.S. sedan market – with two models, the Honda Civic and the Toyota Corolla, accounting for over a third of total compact car sales.
However, the outlook is slightly different within the scope of the EV segment. Three of the six best-selling EV models in America in the first half of 2020 fall into the compact car category – the Tesla Model 3, the Chevy Bolt and the Nissan LEAF – a key statistic which has influenced Kandi America’s decision to ease into the U.S. market through the introduction of its two smallest EV models (from its wide-ranging five EV model lineup).
According to IHS Markit, all-electric vehicles are estimated to command a 16% market share in China and Europe and a 7% market share in North America by 2025. This would represent a considerable uplift from the present, with the IEA estimating that electric vehicle sales will account for a mere 3% of total global automobile sales in 2020.
U.S. Production Facilities
On August 20, 2020, Kandi Technologies’ CEO announced that the company was engaging in talks with potential manufacturing partners, including local agencies across the U.S.-Mexico border, as a complement to its existing manufacturing facilities in China.
“Longer term, however, we are actively exploring the possibility of manufacturing EVs and off the road vehicles locally, as we plan to more aggressively target the fast growing North American market,” Kandi Technologies CEO Hu Xiaoming revealed in a statement (http://nnw.fm/SDyPi).
Johnny Tai is the CEO of Kandi America and has led the company’s U.S. operations since July 2018. Prior to joining Kandi America, Tai was the owner and CEO of Bennche Inc., which specialized in the distribution of ATVs, UTVs and motorcycles to the North American market.
- Kandi Technologies is a Chinese electric vehicle and battery pack manufacturer.
- In 2013, Kandi established a joint venture with Geely Auto to research, develop and produce electric vehicles destined for sale in the Mainland Chinese market.
- The company reported FY2019 sales of $135.7 million, largely as a result of its EV sales and car-sharing schemes within Mainland China.
- Kandi acquired SC Autosports, a Texas-based auto dealership, in 2018 to serve as its exclusive U.S. distributor, operating under the ‘Kandi America’ brand.
- Kandi America recently commenced presales for its K23 and K27 compact EV models in the United States.
- Kandi Technologies operates as a Chinese electric car rival to U.S.-listed peers Nio and Li Auto. It is currently valued at less than 4% of Li Auto’s market cap despite posting FY2019 revenues that were 300% higher.
- Kandi is well-positioned to benefit as the market share of all-electric vehicles is forecast to rise to 7% of total vehicle sales in the U.S. by 2025 (from less than 3% in 2020).