The Final Results of Government Subsidy Review Related to Kandi’s JV Company Released
December 20 2016 - 8:47AM
Kandi Technologies Group, Inc. (the "Company" or "Kandi")
(NASDAQ:KNDI) today announced that the final results of the review
of subsidy payments for electric vehicles (“EV”s) manufactured by
Kandi Electric Vehicles Group Co., Ltd. (the “JV Company,” a 50/50
joint venture between Kandi and Zhejiang Geely Holding Group) from
2013 to 2014 were released. The results came from the
Ministry of Finance of China, the National Development and Reform
Commission, the Ministry of Industry and Information Technology
of China, and the Ministry of Science and Technology of China
(collectively, the “Government”). According to the final results,
the Government will re-calculate subsidy payments for EVs that were
manufactured during the 2013-2014 period pursuant to the 2016
subsidy eligibility guidelines. This re-calculation is the result
of certain complications in the JV Company’s advanced reusable
battery exchange model that necessitated further clarification to
the Government. As a result of dialogue with the Government, the JV
Company has made modifications to its battery exchange model and
has obtained Government approval in February of 2016. Based on
subsidy guidelines, our EV models were eligible to receive
Government subsidies of RMB 50,000.00 (approximately USD 7,195.00)
in 2013, RMB 47,500.00 (approximately USD 6,835.00) in 2014, and
RMB 45,000.00 (approximately USD 6,475.00) in 2016 on a per car
basis. Applying the 2016 subsidy eligibility guidelines for those
EVs it manufactured from 2013 to 2014, the JV Company estimates it
will need to write off approximately USD 6.6 million of previously
recorded account receivables. EVs that were manufactured in 2015
and 2016 remain eligible for the same amount of Government
subsidies.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi,
commented, “after discussion with governmental authorities, the
confusion surrounding the EVs manufactured and sold by the JV
Company during 2013 and 2014 that used the reusable battery
exchange model were finally properly resolved. Although our partner
received a slight penalty from the Government, the JV Company
itself incurred roughly USD 6.6 million in lost subsidies which
converts into USD 3.3 million losses to Kandi on the equity method
of accounting basis. The Government subsidy review did not cause
the major losses, but it has had a significantly negative effect on
our business this year; however, now that it is over, it may have a
strong positive impact on healthy growth of the renewable energy
vehicle industry in the future. Going forward, we will be able to
focus on our core business expansion and we believe Kandi’s future
growth will increase shareholder value.”
Note: All the currency conversions from RMB to
USD referred to in this press release is based on the exchange rate
of 1RMB = 0.1439 USD, published by www.xe.com on the date
before the release of this press release.
About Kandi Technologies Group, Inc.
Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua,
Zhejiang Province, is engaged in the research and development,
manufacturing and sales of various vehicle products. Kandi has
established itself as one of China's leading manufacturers of pure
electric vehicle ("EV") products (through its joint venture), EV
parts and off-road vehicles. More information can be viewed at the
Company's corporate website at http://www.kandivehicle.com. The
Company routinely posts important information on its website.
Safe Harbor StatementThis press release
contains certain statements that may include "forward-looking
statements." All statements other than statements of historical
fact included herein are "forward-looking statements." These
forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects" or
similar expressions, involving known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. The Company's actual results
could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including the risk factors discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on the SEC's website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these risk factors. Other than as required under the securities
laws, the Company does not assume a duty to update these
forward-looking statements.
Follow us on Twitter: @ Kandi_Group
Company Contact:
Ms. Kewa Luo
Kandi Technologies Group, Inc.
Phone: 1-212-551-3610
Email: IR@kandigroup.com
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