Chinese electric vehicle (EV) maker Hozon Auto has signed an agreement with the Hong Kong government to become a key corporate partner of the city, as reported by Yicai Global on March 21. As part of the deal, the government will provide USD25.6m in subsidy for Hozon, on top of a USD200m cornerstone investment for the EV maker. Hozon plans to establish an R&D center, a big data center, and a production base in Hong Kong to promote the development of smart new energy vehicles (NEV) targeting overseas markets. Hozon is among the second batch of 19 companies that joined the Office for Attracting Strategic Enterprise (OASES) program. The program was set by the Hong Kong government to attract companies from industries with strategic importance, including life and health, artificial intelligence, advanced manufacturing, and new energy technology.

The investments could help ease the EV startup’s financial pressure and support its expansion in overseas markets. Last year, Hozon’s electric car deliveriesdropped 16% year-over-year to 127,500 units, failing to meet its sales target of at least 250,000 units. The company has been grappling with the non-abating intense price war in China’s passenger car market. It is considering an initial public offering (IPO) in Hong Kong to raise up to USD1bn, following the USD960m it secured from a cross-over financing round in August 2023.

Sources:

https://www.yicaiglobal.com/news/chinas-hozon-auto-to-receive-usd200-million-financing-from-hong-kong-govt

https://www.dealstreetasia.com/stories/chinese-ev-maker-hozon-funding-388555

Hong Kong to provide $25.6 million subsidy to China EV maker Hozon Auto