Transport Cars

Chinese Electric Carmaker Kandi Plans Rental Network in Beijing and Shanghai

Feb 25, 2014 4:30 pm

Skift Take

It isn’t often that you find a car rental company that manufactures its own vehicles. And, an electric car service is a great fit for parts of China, where air pollution is a major problem.

— Dennis Schaal

Free Report: The Changing Business of Extended-Stay Hotels

Kandi Technologies plans on expanding its electric car rental network to Beijing and Shanghai.


Kandi Technologies Group Inc., a Chinese electric carmaker that rents out vehicles to the public, said the service is profitable and plans to expand it to cities including Beijing and Shanghai.

“I have been meeting local officials from other cities who have been visiting our company almost daily in the past few months,” Kandi Chairman Hu Xiaoming said in a Feb. 21 interview at the company’s office in Hangzhou, Zhejiang province. “They are very interested in our model and keen on promoting use of electric vehicles in their cities.”

Kandi, together with joint venture partner Geely Automobile Holdings Ltd., provides electric vehicles for short-term hire using automated multilevel garages in Hangzhou. Rental rates start from 20 yuan ($3.3) an hour and covers the first 25 kilometers (16 miles), compared with the starting rate of 11 yuan for taxis.

“Kandi’s business model can bypass obstacles in the promotion of electric cars such as inconvenience of charging,” said Harry Chen, a Shenzhen-based analyst with Guotai Junan Securities Co. “By expanding into more cities, it will help stimulate the overall electrical vehicle business in China.”

The automaker’s shares have outperformed the Nasdaq Composite Index this year after tripling in 2013, as China stepped up efforts to combat worsening air pollution and encouraged the adoption of electric vehicles. The world’s second-largest economy is lagging behind its target to have 5 million alternative energy-powered vehicles by 2020 because of a lack of charging stations and high costs.

Local Partners

Kandi is selecting local partners in Shanghai, Beijing and Chengdu, the capital of southwestern Sichuan province, Hu said, without specifying a timeframe. In Hangzhou, the company is working with the local government to add rental stations to public parking lots, hotels, department stores and high-speed train stations, he said.

It may take three to five years for the rental network to cover the entire city, Hu said.

Lu Pin, a sales representative, rents the Kandi EV at least three times a week to make visits or deliveries to customers.

“My boss makes it a rule for all staff who need to go out for business to use the rental EV instead of a taxi,” said Lu, 24, who paid 21 yuan for a 90-minute drive that would have cost three times as much in taxi fare. “We save a lot of money and feel we’re helping to clean up the air.”

Subsidy Cuts

Electric vehicles received a boost this month after China’s central government said it will scale back on previously announced subsidy cuts and extend financial support beyond 2015.

China is home to some of the world’s most polluted cities, where smog levels can surpass World Health Organization safety thresholds by almost 40 times. Outdoor air pollution was found to cause lung cancer and linked to an increased risk of bladder cancer, a WHO agency said, rating it as a carcinogen for the first time.

To combat air pollution, China’s State Council, or cabinet, released a national plan in September that called for a 15 percent to 25 percent reduction in particulate matter by 2017 in the three key manufacturing regions anchored by Beijing, Shanghai and Guangzhou.

China will support the promotion of new-energy vehicles in a second batch of cities and regions, including the northeastern provinces of Jilin, Liaoning and Heilongjiang, the finance ministry said in a separate statement dated Jan. 27.

Despite the official endorsement, battery-powered autos remain a niche product in China’s auto industry, with total sales of 14,604 units last year, or less than 1 percent of total industry sales, according to the China Association of Automobile Manufacturers.

Among other electric automakers, BYD Co. sells its E6 electric car and K9 bus to taxi and bus operators. Tesla Motors Inc. will begin shipping its electric Model S cars to China next month.

–Tian Ying. Editors: Chua Kong Ho, Subramaniam Sharma

To contact Bloomberg News staff for this story: Tian Ying in Beijing at ytian@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

Tags: ,

Next Up

More on Skift

Skift Forum Video: Tourism in a Digital Age from the Met’s Chief Digital Officer
Interview: Kayak CEO on Downplaying TV Ads and Direct Bookings
General Catalyst’s Joel Cutler on the State of Startup Innovation in Travel
Becoming Guest-Centric: Why Hotel Marketing Needs to Change