The owner of Karma Automotive plans to produce electric vehicles in China, becoming the latest company to target the world's biggest EV market.

 

Wanxiang Group, founded by Chinese billionaire Lu Guanqiu, plans to build an EV assembly plant in Hangzhou, China, according to the company's application for an environmental impact review posted on its website.

 

The investment value for the proposed project will be 2.5 billion yuan ($375 million) and the factory will build as many as 50,000 cars a year. 

 

Wanxiang Group bought the bankrupt Fisker Automotive Inc. and has provided the financial backing to restart the company as Karma, the name of its plug-in sports sedan bought by the likes of Justin Bieber and Leonardo DiCaprio. Karma is trying to reboot its image after Fisker failed to repay $139 million in U.S. government loans and filed for Chapter 11. 

 

EV rush

Wanxiang plans to produce cars mainly on the Karma platform at the China plant, including extended-range versions of the Karma and Atlantic models, according to the application. Out of the 50,000 cars a year in capacity, 39,000 have been earmarked for the two-door Atlantic, which has a top speed of 134 mph. 

 

More than 200 Chinese companies -- with backers including Terry Gou, Ma Huateng, Jack Ma and Jia Yueting -- are developing EVs and plug-in hybrids, and they are unveiling prototypes at auto shows and home-electronics expos. 

 

Traditional automakers and a bevy of startups see opportunity in the government's commitment to boost yearly sales of EVs and plug-in hybrids by a factor of 10 over the next decade. 

 

Last year, the central government said it will issue new production licenses to nonautomakers, paving the way for Wanxiang to expand beyond component production. 

 

Experience required

Wanxiang has been widely seen as a potential candidate for the special permit, given its expertise in component production and its purchase of Fisker and U.S. battery supplier A123 Systems. 

 

To qualify for the license, companies need experience in product development and manufacturing. 

 

Clearing the environmental review is one of the steps companies have to satisfy before they can build a factory in China. Wanxiang Group did not immediately comment on the plan. A representative for Zhejiang Environmental Protection Bureau said the project has not yet been approved.