ZAP and Jonway Auto Ramps Daily Production of EV Minivan to Fifty EVs per Day with Target of Reaching 2,000 per Month by 1st Quarter 2016
Oct 27, 2015, 08:36 ET
SANTA ROSA, Calif., Oct 27, 2015 /PRNewswire/ -- ZAP (OTC: ZAAP) -- ZAP and Jonway Auto announce that they have increased factory production capacity and running operations at 7 days a week, single shift, with production of around 50 EV minivans per day in order to meet pressing backlog orders from Dong Feng Motor Corporation (http://www.dfmc.com.cn/dfmczg/main_en.aspx). Dong Feng is demanding delivery of at least 3,000 EV minivans this quarter by December 31, 2015 and expects its orders to increase to no less than 2,000 per month starting January 2016. Jonway Auto is on target to produce 800 EV minivans in October and will be ramping up to meet the 3,000 EV minivans for this year. A second shift with additional factory equipment may be added to reliably meet volumes of 2,000 or more vehicles per month. The target is to reach sales of no less than 20,000 of Jonway's EV minivans in 2016 and aggregating to sales of 100,000 of ZAP and Jonway's EV minivans as projected by Dong Feng over the next three years. The partnership with Dong Feng Motor facilitated by Shi Kong from Hangzhou enables Jonway Auto to offload the cost of lithium battery and the electric motor cost to Dong Feng and Shi Kong. This represents more than half of the cost of materials for the EV minivans. Even with this reduction in the top and bottom line by taking out the lithium battery and motor costs, the projected revenues of the 20,000 EV minivans would exceed US$150 million if achieved, and with reasonable margins to achieve profitability in 2016, barring any supplier parts availability issues.
ZAP and Jonway is seeking funding and partnerships to manage the sales and production demands of the EV fleet market in China. Ultimately, the objective is to be able to build its financial resources in order to sell and produce the whole EV minivan so that direct sales to major customers, partners or dealers can be achieved to further improve gross margins. Due to the high demand for some of the critical supplier parts, ZAP and Jonway Auto are currently in discussions regarding potential partnerships with companies producing lithium batteries and EV motors. Such a partnership could help mitigate the risk of availability of parts and could provide a source of working capital for these high cost items.
About ZAP and Jonway Auto
ZAP and Jonway Auto designs and manufactures quality, affordable new energy and electric vehicles (EVs). Jonway Automobile has ISO 9000 manufacturing facilities, certified for EV manufacturing, and engineering, sales and customer services facilities in China. Jonway has production capacity of up to 50,000 vehicles per year, over 1 million square feet of factory space, and over 65 acres of land and established sales distribution network in China. ZAP, an early pioneer of EVs, brings to both companies a broad range of EV product technologies. ZAP is headquartered in Santa Rosa, California and Jonway Auto is located in Zhejiang Province of the People's Republic of China. Additional information about ZAP Jonway is available at http://www.zapworld.com.
This press release contains certain forward-looking statements defined in the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "estimate," "expect," "intend," "plan," and similar expressions that may tend to suggest a future event or outcome are not guarantees of performance, which cannot be predicted or anticipated. These forward-looking statements are based largely on expectations and are subject to a number of risks and uncertainties, many of which are beyond the control of the Company. Actual results could differ materially from these forward-looking statements.
Contact: Michael Ringstad
707-525-8658x104
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