BEIJING -- Aston Martin is seeking a joint venture in China to help break into the world's biggest market for EVs, CEO Andy Palmer said.
While Aston Martin doesn't have plans to produce EVs bearing the U.K. company's badge in China, it is seeking collaboration to share its lightweight materials and aerodynamic technologies with the Chinese partner as China looks to improve the performance of EVs, Palmer said. Talks are underway with established automakers and startups, the CEO said.
Aston Martin has said by 2030 it expects EVs will account for 25 percent of its sales, with the rest of the lineup expected to be hybrids. But, unlike rivals, the supercar maker isn't able to rely on a large parent company to help fund the move to greener technology.
Chinese battery maker Contemporary Amperex Technology, or CATL, is among a list of battery suppliers Aston Martin is considering for its first electric sports car, the RapidE, Palmer said. Some specific regulations from China on batteries have given a competitive advantage to local suppliers. The RapidE sedan is due to go on sale in 2019 and will be limited to 155 units.
On Wednesday, Aston Martin announced a five-year trade and investment drive worth more than £600 million ($856 million). The company currently imports models such as the Vantage for sales in China.
Aston Martin isn't the only automaker seeking Chinese partners at the present time. Parts supplier and contract manufacturer Magna International is in talks with Beijing Automotive Group for an alliance, people familiar with the matter said.
In the case of Magna, the discussions range from an equal partnership with Beijing Auto to cooperation in areas including manufacturing and parts supply, the sources said, asking not to be identified as negotiations are private. Beijing Auto is the owner of Beijing Electric Vehicle, or BJEV, the biggest EV maker in China.
The negotiations are preliminary and may not lead to an agreement. Representatives for Beijing Auto and Magna declined to comment.
A partnership with Magna, whose Austria-based Magna Steyr unit has contract manufacturing partnerships with Daimler, BMW and Jaguar Land Rover, could help Beijing Auto position itself better in a market that surpassed the U.S. in 2015 as the world's largest for EVs.
Magna is one of the world's biggest suppliers with 328 manufacturing operations around the world, according to its website.
As the auto industry transforms rapidly toward EVs and autonomous cars, major manufacturers are bracing for challenges including billions of dollars in investment with uncertain payoffs. China, which surpassed the U.S. as the top market for EVs in 2015 with government subsidies and stringent emission regulations, has already become an attractive destination for automakers.
"The market size determines everything," said Zhou Jincheng, an analyst at automotive market researcher Fourin. "To make sure they will continue to have a foothold in the market, they are willing to take out some of the profits from their traditional vehicles to invest in EVs, which may not be profitable until 2025 to 2030."
But other carmakers have tied up with local companies to manufacture in China. Later this year, Volkswagen is expected to roll out the first domestically made electric car through an alliance with Anhui Jianghuai Automobile Group, while Ford has teamed up with Anhui Zotye Automobile to make and sell a line of EVs.
Sales of new-energy vehicles in China may top 700,000 units in 2017 and 1 million in 2018, according to the China Association of Automobile Manufacturers.
China requires foreign automakers to form joint ventures with Chinese companies to be able to sell locally. While such partnerships are the quickest way to make EVs in the country, they are also limited by permits. China has dished out only 15 licenses so far for production of new-energy vehicles, posing a barrier to many hopefuls.
Aston Martin's full-year sales rose 58 percent to 5,117 last year, hitting their highest level in nine years as the firm pursues a turnaround plan which could propel it toward a future stock market flotation.