In the latest chapter of a bitter rivalry between two hybrid auto entrepreneurs, startup GreenTech Automotive has just unveiled plans to make an initial investment of $1 billion and start producing 150,000 vehicles annually at a new hybrid development and manufacturing facility in Tunica County, Miss., within the “next few years,” the Memphis Business Journal reports. You might know the company by another name: Hybrid Kinetic Automotive, a moniker that owner Charles Wang and former partner Benjamin Yeung fought over (among other issues) in federal court this summer before reaching a settlement in July. Now the two men have split, forming two competing hybrid car startups, and at least one plant could rise from the rubble.
As the Press-Register noted this morning, Yeung’s Hybrid Kinetic (he kept the company name after the split) also plans to build a hybrid vehicle factory (near Alabama’s Bay Minette), and both companies are reportedly aiming to eventually produce 1 million cars per year (see update). But like most startups aiming to manufacture vehicles, Hybrid Kinetic and GreenTech face plenty of hurdles, including raising financing, moving into production, and developing technology, all of which plagued Tesla in its early years. Hybrid Kinetic is looking to raise some $1.5 billion in financing, and GreenTech’s Tunica plant is expected to be a $6.5 billion project, according to an attorney for the company who spoke with the Associated Press this week.
When it comes to financing, Yeung and Wang eyed a different route before their split than Tesla or competitor Fisker Automotive, which have scored awards of more than $465 million each in low-interest loans from the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing program. By contrast, Yeung and Wang were planning to raise funds through a separate government program, known as EB-5, which gives foreign investors a way to earn a visa by investing in U.S. companies, as the AP reports.
According to the Press-Register, GreenTech and Hybrid Kinetic both still plan to utilize “a government program that grants U.S. permanent resident status to foreign investors who invest at least $500,000 in businesses that create at least 10 jobs.” GreenTech said in an announcement today that funding for the project is coming through the Gulf Coast Automotive Fund and “strategic investments.” Whatever channels GreenTech ends up pursuing for those funds, the target amount is very ambitious, especially for a startup burdened by legal controversy. For comparison, the U.S. government is providing $1.6 billion in loans for Nissan to retool its Smyrna, Tenn., factory to build electric cars and batteries and a whopping $5.9 billion to help to help Ford retool factories in Kentucky and Michigan.
The Memphis Business Journal says that GreenTech plans to churn out a full line of vehicles ranging from subcompacts up to SUVs using engineering and a hybrid engine designed in Germany, with parts coming from both local and foreign suppliers. The initial phase is set to take place on 1,500 acres and create about 1,500 jobs. Whether that will evolve into a multibillion-dollar facility with capacity to produce a million 250,000 cars per year, we’ll have to wait and see.
Update: Wang told the AP in a separate article published today that the attorney’s comment about a million-car goal and $6.5 billion project for GreenTech was inaccurate — the company actually aims to produce up to 250,000 cars per year and only the investment amount ($1 billion) for phase one of the project has been specified. That’s a more realistic but still ambitious goal for a startup. For comparison, 6-year-old Tesla delivered its 700th vehicle last month.