Are the Chinese building an electric car plant in Mississippi?

Green Tech Automotive’s new plant may become the first plant to produce EVs of mainly Chinese content.

Green Tech Automotive (GTA) has broken ground and begun to erect the structure of its new manufacturing facility in Tunica, Miss. GTA calls itself a “U.S. automotive manufacturer,” however that description might lead one to believe that the company produces automobiles. It may someday, but for now GTA is a manufacturer of neighborhood electric vehicles (NEVs). NEVs are low speed, local-use vehicle used in retirement and resort communities. Think fancy electric golf cart for rich Palm Springs golfers. GTA is partnered with a Chinese company and may at some point produce an electric vehicle based on a Chinese platform.

When we last reported on GTA it was being investigated by the SEC. Co-founder Terry McAuliffe (former President Bill Clinton’s wing man) had left the company and ran for governor of Virginia. He won and will be sworn in on Saturday. So to summarize, we have a maker of neighborhood EVs, founded by a politician, partnered with a Chinese electric car company that wants to import EVs, has been investigated by the SEC, and is now building a factory in Mississippi.

Why would anyone want to import and try to sell an electric vehicle in the US? Sales of the Volt, Leaf and Tesla Model S are dead flat since about August of 2012. In total only about 50,000 of the 15 million cars bought by Americans last year were pure EVs. To answer our question, we will point to Zero Emissions Vehicle Credits (ZEVs). Even low volume producers like Tesla can profit hugely from ZEV credits. Imagine an imported Chinese body shell married to a drivetrain assembled in the US from international components. Now image that the Chinese government subsidizes the body, the country that manufactures the battery components subsidizes those, and then the US government subsidizes the total product after it is assembled in the US. Finally, the US government then gives each buyer $7,500 in tax rewards and states waive the sales tax and offer an incentive of $2,500 to the buyer. How can the company coordinating all this taxpayer money lose?

The SEC seemed to think that another reason had to do with Chinese citizens wishing to become US citizens. That was what the investigation may have had to do with according to reports.

Of course the success of such a venture hinges on lawmakers and government appointees playing along and mandating the profitability of EVs in such a system. One would need friends in high places. Like a governor, or maybe even a former president (or future president). This is all speculation on our part except for all the subsidies. Those are all real.

Still image and video courtesy of Youtube.com and MSBDinc