ZAP (fka ZAAP)

[WOLDUMAR]

Zap charging its way in to China's EV market
Andrew S. Ross

San Francisco Chronicle November 23, 2010 04:00 AM Copyright San Francisco Chronicle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Tuesday, November 23, 2010


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0 Zap / ZAP

This is an example of the vehicle Zap Jonway is developing for China's EV market.

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Chalk up another one for Zap in the race to enter China's electric car market

The small Santa Rosa EV maker has just signed a deal with Shanghai officials to provide charging stations, battery swap facilities and maintenance depots for the city's commercial Yangpu district.

Zap will also develop a pilot Electric Vehicle Eco-City program involving the use of Zap vehicles in Yangpu's bus, taxi and government fleets. Sales and marketing offices and R&D centers will be located there.

CEO Steven Schneider was traveling on business and not available for comment Monday, but Jim Wunderman, president of the Bay Area Council, called it "a major milestone for the Bay Area's electric vehicle industry."

Earlier this year, Zap acquired a 51 percent stake in Jonway Automobile, a Chinese car and motorcycle manufacturer, in a $120 million deal approved by the Chinese government in October.

The combined company, called Zap Jonway, is planning to ramp up production next year, primarily at a 3.6 million-square-foot plant in China's eastern coastal province of Zhejiang. Other assets acquired by Zap include 500 Jonway dealerships across the country.

Connections pay: The deal was first broached during Gov. Arnold Schwarzenegger's trade mission to Asia in September, which included a stop in Shanghai, where he was accompanied by Bay Area Council executives. The council's recently opened Shanghai office introduced Zap executives to the right people there and helped negotiate the deal.

"This is a great example of what connecting California innovators with governments and businesses around the world can do," Schwarzenegger said. "As a direct result, Zap is breaking barriers in exporting clean technology from California to China."

It should also make for breakthroughs on Zap's balance sheet. Before the Jonway tie-in, sales amounted to $4.1 million in 2009 and the 15-year-old company has yet to return a profit. But business had already been picking up for its three- and four-wheel vans, pickups, taxis, sedans and SUVs. Customers in the past year include UPS, U.S. military bases and companies in Malaysia and South Korea.

According to its latest five-year plan, China aims to have 1 million hybrids and EVs on the road by 2015, and is investing upward of $15 billion in the sector over the next 10 years. While some estimates are more conservative, global bank HSBC sees China's share of the world's EV market vaulting from 2.7 percent this year to 35 percent by 2020.

That may be one reason why HSBC invested $125 million and took a 10 percent stake in Better Place, Palo Alto's EV company, which this year struck a development with Chery Automobile, China's largest domestic car dealer.

Needing review: How come, a number of readers wanted to know, I didn't mention the "boycott Target" movement in Friday's item about a Target store opening in San Francisco's Metreon?

The movement was triggered by the Minneapolis company's $150,000 donation to a group that ran ads supporting Minnesota gubernatorial candidate Tom Emmer, an avowed opponent of gay marriage.

Folks inside Target were none too pleased, either, it seems. While "the intent" of the contribution "was to support economic growth and job creation," CEO Gregg Steinhafel wrote to employees in August, "I realize our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry."

As a result, he added, the company will "review its decision-making process for financial contributions in the public policy arena."

It's difficult to assess the boycott's impact, although it seemed to have little bearing on the San Francisco Redevelopment Agency's 10-member board, which unanimously approved the project last week.

"None of the public speakers raised it," said Amy Neches, the agency's project planning and development manager. "One of the commissioners alluded to it in his comments, but did not pursue it."

An agency memo noted that in 2009 Target gave approximately $1 million to San Francisco nonprofits, including the San Francisco AIDS Foundation.

Blogging at sfgate.com/columns/bottomline. Facebook page at sfg.ly/doACKM. Tweeting @andrewsross. E-mail [e-mail].

This article appeared on page D - 1 of the San Francisco Chronicle


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