China’s ever-growing electric vehicle industry is setting up shop in Hong Kong, but not to expand business in the minuscule Hong Kong market. Rather they are looking to leverage the city’s financial system for global expansion, Bloomberg reports.
What gives Hong Kong a unique position is its attractive financial sector compared to mainland China. Hong Kong enjoys free trade and the world’s largest yuan market, and its banks can help Chinese EV companies in ways that mainland banks aren’t able to, Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers (CAAM), told Bloomberg.
“China’s big four banks aren’t yet able to directly support the needs of our automakers overseas, including for consumer auto loans, fundraising by dealerships or foreign direct investment to build factories,” Xu said, according to Bloomberg. “Chinese carmakers have arrived at the stage of expanding internationally, and this needs financial support. Hong Kong is a good starting point.”
Foreign exchange controls in China prevent money from moving freely in and out of the country, so businesses dealing with foreign capital face heavy restrictions and intense scrutiny from the government, the report added. On the other hand, Hong Kong, which enjoys some autonomy as a Chinese-controlled Special Administrative Region, has low tax rates with only limited government interference.
So far, China’s Contemporary Amperex Technology Co., the world’s largest battery manufacturer, said it plans to open its international headquarters in Hong Kong, spending HK$1.2 billion ($154 million) to make it happen and hiring 500 employees. Other companies include all-electric auto brand Hozon New Energy Automobile Co. and Black Sesame Technologies, among others. Chinese EV-related companies have pledged HK$8.6 billion ($1.1 billion) in investments and the hiring of 1,300 workers, Bloomberg writes.
This is certainly good news for the city, which took a hit from heavy COVID-19 restrictions and China’s economic slowdown, with a lot of companies reducing staff and sparking an exodus of talent out of the city.
The Hong Kong stock exchange already hosts BYD and Geely, and CATL and Hozon are also mulling over going public via the Hong Kong stock exchange, which is considered both less restrictive and considerably less conservative than the Shanghai exchange.
Electrek’s Take
For Chinese companies to expand, they will certainly need to set up locations outside of China, that is clear, and Hong Kong seems like a smart move. Meanwhile BYD is pushing international growth with its plans to build an EV factory in Hungary, and other automakers are looking to set up production in Europe as well. Chinese company MG, BYD, and Chery have also been scouting sites in Mexico and talking to officials for better access to the North American market, according to the Financial Times. MG is planning to build a $2 billion factory, while BYD is ramping up investments worth hundreds of millions for its own factory – actions which have set off alarm bells in Washington over trade war concerns with China.
An interesting aside, Hong Kong, being a former British colony, is the first market for Chinese automakers to launch right-hand drive models. Zeekr, owned by Geely, and XPeng are planning to bring their first right-hand drive vehicles to Hong Kong. Other emerging EV markets such as Indonesia, Malaysia, and Thailand also use right-hand drive, which puts Hong Kong in a good spot to reach these markets as well.
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The California Air Resource Board (CARB) has withdrawn its request to enact the proposed Advanced Clean Fleets rule, which required fleets that are “well-suited for electrification” to reduce emissions through the phase-in of Zero-Emission Vehicles (ZEVs) and the banning of commercial diesel sales after 2035.
“Frankly, given that the Trump administration has not been publicly supportive of some of the strategies that we have deployed in these regulations, we thought it would be prudent to pull back and consider our options,” CARB chair Liane Randolph said in an interview. “The withdrawal is an important step given the uncertainty presented by the incoming administration that previously attacked California’s programs to protect public health and the climate and has said will continue to oppose those programs.”
Here’s hoping the BEVs and ZEVs have better luck next round.
Electrek’s Take
While some may celebrate the delay of the Advanced Clean Fleets rule, their celebrations will undoubtedly prove to be myopic and short-lived. The reality is that America is no longer the world leader in technology or transportation that backward organizations like the American Trucking Association believe it to be, and the fact is that delaying a transition to cleaner, more efficient technology will only put the US further behind its economic rivals in Asia and the Middle East.
Even before this Pyrrhic victory for American truck brands that have been slow to push BEVs into production, demand for diesel was at a generational low, and companies like Volvo, Renault, and Mercedes-Benz have been logging millions of electric miles on their deployed trucking fleets.
All of which is to say: if you thought it was going to be hard for American brands to catch up before, it’s going to be even harder now.
In an official announcement released at 8:15PM last night, Walmart-backed electric van company Canoo filed a voluntary petition for relief under Chapter 7 of the US Bankruptcy Code and will cease operations immediately.
“We would like to thank the company’s employees for their dedication and hard work,” said Tony Aquila, Canoo CEO and one of the company’s largest investors (according to the press release). “We know that you believed in our company as we did. We are truly disappointed that things turned out as they did. We would also like to thank NASA, the Department of Defense, The United States Postal Service (‘USPS’), the State of Oklahoma and Walmart for their belief in our products and our company. This means a lot to everyone in the company.”
As a result of the chapter 7 filing, Canoo will cease operations effective immediately, 8:15PM on 17JAN2025. The next step in the company’s dissolution will see a court-appointed trustee manage the liquidation of the company’s remaining assets.
Electrek’s Take
Rumors fueled by outspoken former employees of Canoo began circling late last year, with furloughed employees urging Oklahoma state leaders to “hold the electric vehicle company accountable” after it shuttered the OK production line that had received more than $100 million in state incentives.
The same employee claims that the company was being wildly mismanaged, and that what few Canoo vehicles the company said it had built in the Oklahoma plant were actually built in Texas, and that no vehicles were actually ever built in OK. “Nothing was functioning,” the unnamed employee said, speaking to local news channel KFOR. “There was no, there was not one robotics line that actually worked to fabricate a part.”
You could argue that the employees should also be held accountable for happily collecting paychecks without actually producing anything this whole time, but that’s a conversation for another day. For now, I’ll be mourning the loss of what could have been a fun little domestic off-roader, and hoping Canoo’s employees find a soft landing and better jobs elsewhere.
The US Department of Energy (DOE) today announced $1.2 billion in financing to replace Puerto Rico’s fossil fuel plants with solar and battery storage through 2032.
The DOE’s Loan Programs Office announced two conditional commitments and one loan closing to power producers in Puerto Rico. Each supports a project contracted with the Puerto Rico Electric Power Authority. The announcements include:
The closing of a $584.5 million loan guarantee to subsidiaries of Convergent Energy to finance a 100 MW solar farm with a 55 MW (55 MWh) battery energy storage system (BESS) in the municipality of Coamo and BESS installations in the municipalities of Caguas (25MW/100MWh), Peñuelas (100MW/400MWh), and Ponce (up to 100MW/400MWh)
A conditional commitment for a loan guarantee of up to $133.6 million to a subsidiary of Infinigen for a 32.1 MW solar farm with an integrated 14.45 MW (4.76 MWh) BESS, and a co-located standalone 50 MW (200 MWh) BESS expansion in the municipality of Yabucoa
A conditional commitment for a loan guarantee of up to $489.4 million to a subsidiary of Pattern Energy for three stand-alone BESS in the municipalities of Arecibo (50 MW/200 MWh), and Santa Isabel (50 MW /200 MWh and 80 MW/320 MW), and a 70 MW solar farm with an integrated BESS in the municipality of Arecibo.
If all are finalized, these projects would more than double LPO’s support for utility-scale solar generation and battery energy storage in Puerto Rico.
LPO provides low-cost financing and a rigorous due diligence process, making it a valuable resource for Puerto Rico as it works to rebuild an affordable, reliable, and clean energy system. As a result of reliance on imported fuel, the persistent threat of tropical storms, and underinvested infrastructure, Puerto Ricans today face average energy costs that are twice the US average – all while consuming only one-quarter of the energy of the US per capita.
LPO’s initial loan to a power producer in Puerto Rico, Project Marahu, closed in October 2024, and when complete will add more than 200 MW of solar and up to 285 MW of stand-alone energy storage to Puerto Rico’s grid.
Through its September 2023 partial loan guarantee to Project Hestia, LPO also supports virtual power plant (VPP)-ready rooftop solar and battery storage installations in Puerto Rico. As a nationwide project, Hestia’s sponsor is committed to at least 20% of installations under Project Hestia going to homeowners in Puerto Rico.
As part of its procurement plan, Puerto Rico Electric Power Authority seeks to install 1,500 MW of battery storage and requires a minimum capacity of storage to be co-located with each utility-scale solar project. Energy storage systems currently online in Puerto Rico are being dispatched every day.
When including Marahu, LPO’s closed and conditionally committed financing supports over 100% of the capacity Puerto Rico Electric Power Authority aimed to procure under its initial request for energy storage project proposals, the first of six.
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