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McAuliffe company’s China hook-up: Will it work?

By   /   April 29, 2013  /   News  /   No Comments

Part 13 of 76 in the series Terry McAuliffe - Carmogul

GOING BIGGER: GreenTech Automotive has signed an agreement with JAC Motors of China to assemble a four-door sedan, called the Rejoice.

By Kenric Ward | Watchdog.org

FREDERICKSBURG – Automotive experts expressed doubts about an electric-vehicle venture announced by Terry McAuliffe’s former company and a Chinese firm.

GreenTech Automotive, which McAuliffe chaired until late last year, said last week that it will assemble a four-door sedan in collaboration with JAC Motors of China.

Until now, GreenTech has only marketed a small, two-door model called MyCar. Sales figures for that vehicle have not been disclosed by the company, but GTA said it expects to begin producing 2,000 units of the larger Rejoice model in Mississippi by “late 2013.”

JAC – short for Jianghuai Automobile Co. – presents itself as one of China’s leading vehicle manufacturers. The state-owned company is the country’s largest bus chassis producer and sold 226,000 vehicles in the first half of 2012.

According to the Automotive Business Review, JAC will deliver “2,000 units of third-generation pure EVs in order to develop the U.S. electric-vehicle market.”

“JAC claims to have increased the battery capacity of EVs from 15kWh to 19kWh and the driving range per charge on urban roads by 30 percent from 100 kilometers to 130 kilometers (81 miles),” the news report said.

But industry experts interviewed by Watchdog said the GTA-JAC announcement left many details unaddressed – including who is doing what. Some said JAC’s track record raises concerns.

“They claim a 19 kilowatt-hour battery pack will give nearly 100 miles of range. A simple comparison with other electric cars shows that to be unlikely,” said David Herron, who edits the automotive news website, ChargedEVS.com.

“The Nissan Leaf has a 24-kilowatt-hour pack, and is EPA certified with a 78-mile highway range. Their smaller pack should provide less range than you get from the Leaf.”

Herron wondered, “They don’t say anything about the drive train other than that GTA developed it — but what does that mean?”

GTA — which sued Watchdog this month for $85 million, alleging that its reporting defamed the company and damaged its prospects with investors — has declined to comment.

But in 2009, GTA president/CEO Charles Wang told the Memphis Business Journal that GreenTech’s hybrid engine would be designed by a German company. He did not name the company, and GTA’s website contains no further information.

Compared to GTA’s MyCar, a two-seat neighborhood electric vehicle with a top speed of 25 mph, the five-passenger Rejoice sedan would represent a big step up in class.

Greg Anderson, author of “Designated Drivers: How China Plans to Dominate the Global Auto Industry,” isn’t certain that JAC can deliver the goods.

“They’re not high-quality cars,” Anderson said of the JAC line. “They rattle. They bring no real EV expertise to the table. They’re not high-quality cars.”

Anderson said JAC “only makes news when someone else gets their vehicle and puts it alongside a competitor’s.”

KNOCK-OFF: JAC Motors’ pickup truck was pulled from the Beijing Auto Show after Ford complained that it mirrored the F-150.

That’s what happened in advance of the 2012 Beijing Auto Show, where a JAC pickup truck appeared to be a clone of the Ford F-150.

Ford complained and JAC’s “4R3” was barred from the show.

The vehicle displayed “such blatant Ford design cues as a tall grille, stepped headlamps and, of course, a blue oval badge,” reported LeftLaneNews.com.

Under the hood, however, there was no comparison.

In place of the Ford’s big V6 and V8 power trains, the 4R3 uses a 2.8-liter diesel that is said to produce just 108 horsepower.

“That’s probably not enough power to move a real F-150,” the report concluded.

Though Anderson says Chinese automakers have proven adept at cosmetic copy-catting and reverse-engineering of U.S., Japanese and Korean vehicles, he doubts that JAC or GreenTech have the technological know-how to be leaders in the electric-vehicle market.

“It’s hard for me to imagine that a niche of limited-range, limited-speed are going to serve many people,” he told Watchdog from Los Angeles.

Herron said GTA’s hook-up with JAC won’t require many U.S. employees.

“It’s unlikely that GTA would develop its own motor controller and other components. They only need a couple of people to install parts and a couple of people for QA (quality assurance),” said Herron, who also writes for torquenews.com.

Herron said that such light-assembly operations have been tried by other U.S. electric-vehicle companies, including Coda Automotive. “They take a glider (a motorless chassis) and drop in a drive train,” he said.

But Herron noted that Coda, Fisker and other EV start-ups have suffered a series of reverses, laying off workers and, in some cases, halting production.

“It feels like Coda all over again, but without the b——t hype,” said Ash Sutcliffe, founder and chief editor of China Car Times.

“JAC models are nice little cars, nothing aspirational, but they are designed in Italy and have unusually high road clearance. They also had a major recall due to rust issues,” Sutcliffe told Watchdog in an email.

That said, he added, “I hope they do well in the USA.”

Neither Wang nor McAuliffe had any experience in EV engineering or the general automotive business and its many moving parts.

But in GTA’s joint announcement with JAC this month, GreenTech executive vice president for sales and marketing, Marianne McInerney, declared, “The five-passenger sedan is a natural complement to our two-passenger MyCar product line.”

She said GTA has “distribution agreements for the sale of more than 30,000 units over the next three years.”

Auto industry analysts maintain that EVs have a market niche, but even the most enthusiastic supporters doubt that vehicles like MyCar or Rejoice will be able to compete with 34-mpg gas-powered minicars like the $13,000 Chevrolet Spark, manufactured in Korea.

The price for MyCar range up to $20,000. The higher costs are driven by costly battery packs and lower economies of scale.

The National Highway Traffic Safety Administration forecasts that EVs will account for only 3 percent of new U.S. autos sold in 2025.

Regarding GreenTech, retired Northwest Mississippi economic developer Pat Nelson said the company hasn’t inspired confidence.

“I’ve got to see more than just three prototype cars and a handful of employees before I can say it’ll develop into a major employer,” Nelson told the Memphis Commercial-Appeal last December.

Anderson says JAC won’t be much help with technology.

“As state-owned company, (JAC) doesn’t have an incentive to be an innovator,” said Anderson, who makes business regular trips to China and heads Pacific Rim Advisors, a consulting firm.

“The Chinese central government has been pressing for research and development in EVs. The guys running the companies are politicians, so they want to be seen as doing so.

“But only one company — BYD Auto — is doing much. It sold 12,000 sold EVs to the government, but that’s out of a total (Chinese) market of 19.5 million vehicles,” Anderson said.

As for the company that McAuliffe founded and left, Herron said, “The specs we know for GTA’s attempt don’t even match the Nissan Leaf.”

“All this makes me reluctantly have to express doubt over GreenTech Automotive’s prospects.”

 Contact Kenric Ward [email protected]

Part of 76 in the series Terry McAuliffe - Carmogul
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  2. VA: Media echo Watchdog exclusive on McAuliffe’s electric car maneuvers
  3. No news here: PolitFact brands Terry McAuliffe’s electric-car claim ‘false’
  4. Experts question source of McAuliffe car-company funding
  5. Terry McAuliffe on business ventures: ‘Some work, some don’t’
  6. How McAuliffe’s car company failed the Virginia test, landed in Mississippi
  7. Virginia official wants probe of McAuliffe company ‘visa-for-sale’ program
  8. McAuliffe car company sues Watchdog in libel claim
  9. Barack Obama’s GreenTech connection: Rick Wade
  10. Silence, secrecy, cops follow GreenTech’s China deal
  11. McAuliffe hones China’s crony-capitalism model in U.S.
  12. Promises keep Tunica County afloat
  13. McAuliffe company’s China hook-up: Will it work?
  14. McAuliffe car lags in Domino’s delivery
  15. McAuliffe car co. parent in off-shore tax shelter
  16. Lawmaker gives feds one more week for EB-5 answers
  17. Bolling: McAuliffe’s Mississippi package ‘attractive’
  18. Inside, execs knew McAuliffe plan had ‘substantial risk’
  19. Union darling McAuliffe and his non-union car company
  20. Did Clinton aid the birth of ‘McAuliffe’ car company?
  21. McAuliffe feels heat over GreenTech resignation
  22. TV report: One year later, ‘party is over’ at GreenTech
  23. Months after he said he left company, McAuliffe kept talking GreenTech
  24. Clinton connection: More money for McAuliffe
  25. Terry McAuliffe used loophole to avoid key SEC oversight of his car company
  26. VA officials: McAuliffe green car more politics than biz
  27. McAuliffe car company announces it’s ready to roll — again
  28. Before Watchdog, McAuliffe blamed federal officials for money trouble
  29. McAuliffe gets cash from GreenTech exec, board members
  30. Watchdog report on McAuliffe spurs FOI request to Homeland Security
  31. McAuliffe leaves GreenTech questions hanging at debate
  32. Totally wired: McAuliffe went to Napolitano to expedite company funding
  33. McAuliffe bragged about GreenTech’s cash position while begging feds for faster processing of ‘cash for visas’
  34. Investigation targets Homeland official’s relationship to McAuliffe company
  35. Even before news of federal probe, McAuliffe ducked GreenTech questions
  36. McAuliffe company pressed Homeland official on 81 investor visas
  37. Rodham company sought visa for controversial Chinese exec
  38. Immigration official says he met with McAuliffe to discuss visas for foreign investors
  39. Whiners: Mayorkas says Gulf Coast ‘continues to complain’
  40. VIDEO: Ex-GreenTech employee says little happened at Horn Lake plant
  41. Online ad to Terry McAuliffe: Drop your lawsuit
  42. National security on ‘hold’: Lawmakers press McAuliffe for answers
  43. Citizens United documentary film delves into McAuliffe, GreenTech
  44. VIDEO: Terry McAuliffe’s 15 million-square-foot car plant … in China
  45. Feds call McAuliffe car company’s use of investment program ‘possible fraud’
  46. GreenTech courted Obama’s Solyndra aide
  47. GOP legislators call for McAuliffe to answer GreenTech questions
  48. McAuliffe ‘desperate’ over documentary, Citizens United says
  49. GreenTech weighed Fisker-style federal loan
  50. Group tells Terry: Follow ‘McAuliffe Standard’ on disclosure
  51. Car and Driver races into GreenTech controversy
  52. Congressman: McAuliffe owes Virginians explanation about White House meeting
  53. Feds loosen oversight as McAuliffe car company makes mysterious management change
  54. GreenTech execs use Times and ABC to throw McAuliffe under the (non-electric) bus
  55. Aide in union contribution swap hosts California fund-raiser for McAuliffe
  56. Despite denials, docs show McAuliffe company asked feds to fast-track visa for investor tied to spy list
  57. Former Democrat Party director was on GreenTech payroll
  58. More bad news for McAuliffe car company as GreenTech China venture stalls
  59. Clinton Foundation posts deficits on McAuliffe’s watch
  60. VIDEO: GreenTech record dogs McAuliffe at energy forum
  61. Auto industry expert labels McAuliffe electric car ‘preposterous’
  62. Democratic leaders have their own Bain pain in Mideast private equity deal
  63. Hillary PAC adviser served as GreenTech spokeswoman
  64. New emails add evidence McAuliffe pressed U.S. officials to approve GreenTech funding
  65. After endorsement, Post shrinks facts to cover Terry McAuliffe
  66. Ties that bind: Following the McAuliffe-Clinton money trail
  67. McAuliffe tilts at windmills; Chinese venture goes bust
  68. Federal investigations cast shadow over McAuliffe on Election Day
  69. DHS inspector over GreenTech-McAuliffe case is under investigation
  70. McAuliffe names former GreenTech employee secretary of commonwealth
  71. McAuliffe lawyers, accountants sort GreenTech stock amid federal investigations
  72. Nuking filibusters, Dems clear way for Mayorkas at Homeland Security
  73. U.S. judge hands Watchdog a victory over VA governor’s green-car company
  74. Attorney: McAuliffe is ‘100 percent divested’ of GreenTech
  75. Investigation finds Mayorkas used visa program to help White House allies
  76. Criminal investigation sought in McAuliffe-Mayorkas dealings


Kenric Ward was a former San Antonio-based reporter for Watchdog.org.