Smith Electric Vehicles Corp. is moving into China to combine its vehicle design with products from a Chinese vehicle parts company.
Last week the company announced its letter of intent with Wanxiang Group that includes a Wanxiang investment in Smith worth $25 million and a $75 million joint venture between the two companies.
The joint venture will be for school buses and commercial vehicles in China. Smith will provide the designs and Wanxiang will provide the parts to create a number of electric vehicle fleets.
The two main parts of Smith’s designs include Smith Drive, its drive and control system, and Smith Power, its battery system that uses cells from Valence (NASDAQ: VLNC) and A123 (NASDAQ: AONE).
And Wanxiang has been developing electric vehicle parts, which will be used to build these school buses and commercial vehicles.
Smith currently produces two models of trucks, each named after an integral figure in science. The Newton weighs approximately 16,500-26,400 lbs with the ability to travel between 40 and 150 miles, and the Edison is slightly smaller, weighing between 7,700 and 10,400 lbs and traveling between 40 and 100 miles.
Only the Newton is currently available in the U.S.
Smith Electric and Wanxiang signed the letter of intent at the U.S./China Economic and Trade Cooperation Forum last Friday, and it is subject to third party approvals and the execution of these agreements.