Dallas, Texas 07/10/2015 (Financialstrend) – Chinese electric car manufacturer Kandi Technologies Group Inc (NASDAQ:KNDI) will have to ramp up its production process after receiving a sales contract worth $89 million. The contract comes as demand for electric cars in China continues to grow especially with the placement of orders online.
Terms of the Deal
The $89 million contract is for 4,000 cars signed between Kandi Technologies’ joint venture Greely Automobile and Zhejiang Shi Kong Electric Vehicle Co. Ltd. Kandi Technologies Group Inc (NASDAQ:KNDI) has until year end to make the deliveries as per the terms of the agreement. Electric car sales have been rising in China as interest for environmentally friendly cars continues grow.
Zhejiang plans to use the cars to enhance its penetration of new energy vehicles through the Internet Plus concept. The 4000 units should be a great addition to the company’s innovative programs geared towards encouraging the adoption of environmentally friendly vehicles.
The deal is made of 1,500 of the Kandi K11 ‘Panda’ model and 2,500 of the Kandi k10 ‘Mini.’ The joint venture has been a success for Kandi Technologies Group Inc (NASDAQ:KNDI) which generated sales of $30.6 million in the first quarter on selling 1, 670 vehicles. However, Tesla continues to control the luxury end of the market having generated $477 million in revenues from the country last year.
Concerns over Charging Stations
Kandi Technologies Group Inc (NASDAQ:KNDI) seems to be receiving much support on its electric cars as Tesla continues to struggle on the sales front. The Palo Alto automaker saw its shipment for the month of May slide to a paltry 163 units down from an average of 414 units for the past 12 months.
Electric car sales in China have mostly been affected by the range anxiety syndrome as the charging infrastructure isn’t that well-built compared to those in the US and Europe. Potential buyers have shied away from buying electric cars on concerns that they may struggle to find charging stations when they need them the most.