UQM, Chinese partner sign joint venture

LONGMONT — UQM Technologies Inc. (NYSE American: UQM) has signed a joint venture with a Chinese company that will help the company develop a manufacturing presence in China.

UQM signed the agreement with China National Heavy Duty Truck Group Co. Ltd. and Sinotruk Global Village Investment Ltd., a Hong Kong-based affiliate of China National Heavy Duty Truck. Under the joint venture, UQM will acquire a 25 percent stake, with the Chinese partners owning 75 percent. UQM has a three-year option to increase its stake to 33 percent.

The partners will capitalize the joint venture with $24 million, with $6 million coming from UQM, contingent on the closing of a second-stage investment in UQM by China National. The company in September closed a stock-purchase agreement with China National, whereby the company invested $5.1 million to obtain a 9.9 percent stake in UQM.

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A second-stage investment will increase China National’s stake in UQM to about 34 percent, for an additional $23.2 million.

The joint venture will be named Sinotruk Qingdao Zhongqi New Energy Automobile Co. Ltd. and will be headquartered in the city of Qingdao, China.

The joint venture will serve the China market for commercial vehicle E-drives and the global market for E-axles, with initial annual production capacity of 50,000 systems, and it is anticipated to become operational in 2019.

“We are very excited to have signed a joint venture agreement with CNHTC,” Joe Mitchell, president and CEO of UQM, said in a prepared statement. “Our strategy for many years has been to align ourselves with a Chinese partner that would enable us to have a local manufacturing presence in China. This JV agreement gives us the opportunity to manufacture and sell our electric propulsion systems to the largest market in the world for electric vehicles. We believe that our alliance with CNHTC, given their size, strength, and world class reputation in the global commercial vehicle market, combined with UQM’s second-to-none electric propulsion technology, will generate many opportunities for growth.”