CHJ Automotive began accepting downpayment for the Leading Ideal One on April 10 at a uniform retail price of ¥328,000 (after subsidies). Deliveries are expected to start in Q4 2019.

This article appeared in the January 2019 (Vol.14, No.1) issue of China Automotive Review (CAR), our monthly publication in English exclusively focused on the Chinese auto industry.

CHONGQING – CHJ Automotive just got a step closer to getting the coveted license to produce its Leading Ideal One extended range electric SUV.

The Chinese smart EV startup is expected to acquire 100 percent of Lifan Automobile Co., Ltd., a subsidiary of the Chongqing Lifan Industry Group, for ¥650 million through Chongqing Xinfan Machinery & Equipment Co., Ltd., an entity legally represented by Shen Yanan, co-founder of CHJ Automotive.

The share sale was announced in a circular released by Lifan Industry Group on December 18, exactly two months after CHJ Automotive unveiled the Leading Ideal One on October 18.

The previous day, Lifan Industry Group and CHJ Automotive signed a strategic cooperation framework agreement in Chongqing to jointly develop solutions for new energy vehicles, connectivity, smart transportation, human vehicle interaction and data sharing.

The agreement covers six major areas: sharing of extended range electric vehicle power module control technology, vehicle HMI systems, dedicated vehicle for car sharing and ride-hailing, data analysis, scenario-based discussion and data sharing based on telematics, as well as the possibility of Lifan Industry Group participating in the latest financing round for CHJ Automotive with financing amount and price to be decided at a later date.

Lifan currently has two subsidiaries – Lifan Auto and Lifan Passenger Vehicle, both of which own traditional fuel and new energy vehicle production license. CHJ Automotive will likely use the production license from Lifan Auto for the production of the Leading Ideal One at its smart manufacturing facility in Changzhou, Jiangsu Province, similar to what WM Motor had done with its manufacturing facility in Wenzhou, Zhejiang Province using a production license it purchased from Shenyang Polarsun for ¥1.18 billion.

CHJ Automotive's manufacturing facility in Changzhou, which has a designed annual output capacity of 300,000 vehicles, has already completed construction. It is currently conducting testing of the Leading Ideal One, which is expected to be launched to market in Q4 2019 at a price of under ¥400,000 before subsidies.

The Chinese smart EV startup camp has used various ways to gain production license. NIO and Xpeng Motors have selected the contract manufacturing route with partners JAC and Haima Auto respectively, while DearCC and Byton, in addition to WM Motor and CHJ Automotive, have taken the "shell-purchase" route – acquiring existing manufacturing assets. Byton, for example, acquired a production license from FAW Group, a series B financing round investor, for about ¥850 million.

Li Xiang, founder and CEO of CHJ Automotive, is a huge opponent of contract manufacturing and firmly believes in building and operating a manufacturing facility on its own.

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The above article appeared in the January 2019 (Vol.14, No.1) issue of China Automotive Review (CAR), our monthly publication in English exclusively focused on the Chinese auto industry.