Ford and Chinese automaker Zotye will partner up on a new line of electric vehicles, we learned Wednesday. The pair is creating a joint venture—Zotye Ford Automobile Company—that they say will offer “a range of stylish and affordable electric vehicles for consumers in China.” It’s a 50/50 partnership, with the pair investing roughly $756 million (RMB 5 billion). The as-yet unnamed brand will get its own dedicated R&D center, and a new factory in Zhejiang Province will build the EVs for domestic consumption.
The Chinese market is especially coveted by Western automakers, which see lots of untapped potential—and the chance to make lots of money. It’s a particularly important market for EVs; even though only 1.5 percent of Chinese vehicle sales are electric, in 2016 that figure accounted for 40 percent of global EV sales. And that’s only going to grow as the country plans to phase out the internal combustion engine in the coming decades.
But tapping that market requires compromises on the part of foreign car companies. China levies a hefty 25 percent import duty on imported vehicles, so cars need to be built locally to remain competitive on price.