Here come the Chinese electrics

With all the Chinese EV automakers waiting in line to jump into the American market, Kandi, a subsidiary of Geely Group beat them to the punch.

The Kandi EX3, a five seat CUV will sell for less than $30,000 and come with a $7,500 U.S. federal tax credit.

Shares of Kandi Technologies Group rocketed as much as 40 percent last month after the electric car maker announced it had received approval to import two of its vehicles, a compact CUV and a two-seat micro coupe, to the United States.

The National Highway Traffic Safety Administration approved Kandi to ship its Model EX3 and Model K22 to the U.S. That follows on the heels of a determination from the IRS that buyers of 2019 and 2020 Kandi models are eligible for a $7,500 income tax credit.

“With this, we are confident in introducing our reliable vehicles to the American public,” CEO Hu Xiaoming said in a statement. “We believe both the EX3 and K22 are competitive in price and quality with advanced tech features that are in demand by American consumers.”

Deep pockets.

The Kandi K22 will sell for less than $20,000, before a $7,500 tax credit

While the two vehicles are all electric, Kandi is not a “pure play” electric automaker like Tesla. Kandi Technologies is the joint venture of Kandi Vehicles and Geely Group, one of China’s largest automakers. Geely also owns Volvo and those two firms have created a well-funded international EV producer, Polestar, which is set to begin rolling out product.

Kandi shares have risen more than 120 percent in the past year and hit a 52-week high of $8.53 a share.

The fast rise was short-lived. The stock dropped 16 percent this week after the Chinese government halved its EV subsidy to $3,700 per vehicle. In announcing the cut, the Finance Ministry also urged local governments to cut subsidies after a three-month period, thus reducing the incentives nearly 67 percent.

China going electric

China has good reasons for these moves. The nation is mandating sharp increases in the number of electric vehicles and wants innovation, not tax incentives, to drive the market. The pain is expected to be short-term since the cost of developing electric vehicles has begun to fall in China.

Kandi made its ambitions clear last year when it showed off new U.S. versions of the EVs in Texas. In order to facilitate its entry, Kandi acquired an ATV dealer/distributor, Sportsman Country, in Garland, Texas.

Pricing for the EX3 has not been announced. The CUV seats five and boasts a range of 188 miles. Kandi sells it in China as an EV version of Geely’s EX3 crossover, where it’s available for less than $20,000 after incentives. Its closest U.S. competition is the Ford EcoSport, which is petrol powered.

It’s hard to say what the K22, a two-seater micro coupe, will focus its sales towards. Currently, there’s only the Smart EV, which is considered a niche vehicle. The K22 has an advertised range of 83 miles with a top speed of 65 mph. Whereas the Smart EV MSRP is in the upper $20k, Hu indicated that the Model K22 should be priced at less than $20,000 when it enters the U.S.

Details coming

The company said it will now begin the process of launching both models for the American market, although no information about a dealer network or firm timeline is known at this point.

“We are thrilled Kandi Model EX3 and Model K22 received approval from the NHTSA. Kandi CEO Hu Xiaoming said in a press release. “The approval has demonstrated our EV models meet all the necessary requirements and standards of the U.S. government. With this, we are confident in introducing our reliable vehicles to the American public. We believe both the EX3 and K22 are competitive in price and quality with advanced tech features that are in demand by American consumers.”

Here is a more nuanced view by Aaron Rockett: