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Kandi Technologies, Corp. Welcomes Recent Chinese Government Subsidy Policy

^{Published on 2010-06-08 04:45:27 - Market Wire}
 

JINHUA, CHINA--(Marketwire - June 8, 2010) - Kandi Technologies, Corp. (NASDAQ: [ KNDI ]), a leading Chinese exporter of recreational vehicles and developer of the "COCO" all electric LSV -- which early this year forged a China-based multi-company Alliance to create a large-scale, "daily commuter" electric vehicle (EV) model city in Jinhua City, Zhejiang Province -- commented today on the latest announcement by the Chinese government relating to planned trial subsidies for China's EV and hybrid manufacturers aimed at reducing emissions and gasoline consumption. The Company said it welcomed the new subsidies policy which was published by The Chinese Ministry of Finance (MOF) on June 1 and widely covered by both Chinese and Western media. (An official link to the announcement is [ http://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/201006/t20100601_320713.html ]). The Company expects the new government policy will fast track the commercialization of EVs in China, and will benefit Kandi's current growth strategy to become not only a major EV producer in China, but also a leading EV infrastructure and service provider.

According to the official announcement from MOF's website, the trial will be initiated in five Chinese cities, including Shanghai, Hangzhou, Changchun, Shenzhen and Hefei. Some of the highlights of the pilot program are:

• Each Pure Electric Vehicle will receive subsidies up to RMB60,000 (about US$8,800);
• Plug-in hybrid vehicles will receive subsidies up to RMB50,000 (about US$7,320) each;
• All subsidies will be paid directly to EV manufacturers;
• Government investment and policy support for EV infrastructure, such as battery charging stations.

Infrastructure Development Must Precede Mass Sales

Mr. Xiaoming Hu, Kandi's Chairman and CEO, commented: "We are extremely excited about the Chinese government's initiative to promote the growth of the Chinese EV industry. The new EV policy is also a validation of Kandi's vision of the future of the EV industry, and our goal to become one of leading players in this promising space. However, while optimistic, we are carefully studying the announcement and will engage in related discussions with various government agencies and Alliance partners to fully explore the specific benefits of this policy for us."

Mr. Hu stated further, "In my view, what is most significant about the announcement is the strong Chinese government support for EV development that it reflects. Also, by addressing the potential for government support of the infrastructure required to make EV commercialization a reality, there is recognition in the announcement of the significant infrastructure development that must occur to boost widespread consumer support for EVs. Fortuitously, this is at the heart of the strategy that Kandi and its Alliance partners have been pursuing, with our focus on a comprehensive solution to making pure electric, battery powered personal transportation a reality. From the start, perhaps in contrast to others, we have been aiming for nothing less than a revolutionary all electric solution which recognizes and addresses the limitations of current battery technology and mandates multi-industry relationships in partnership with the government."

Mr. Hu added, "In this regard, I must continue to emphasize that these most recent government announcements will not result in an immediate boost to pure EV sales, but rather, provide strong new underpinnings for continuing progress in the steps we are taking with our Alliance partners to develop future mass sales of pure EVs. With this apparent further government endorsement of our strategy, the main focus of our Alliance -- more strongly than ever -- is on bringing to fruition an EV 'model city' in Jinhua which, if successful, will pave the way for expansion to other cities in our region, and then nationally. A key element of this plan has been and will continue to be developing a strong relationship with government at all levels as well as our strategic partners to move forward plans for infrastructure development such as building and equipping battery stations, optimizing electric power consumption, and also, increasing convenience and reducing costs to consumers."

About Kandi Technologies, Corp.

Kandi Technologies, Corp. (NASDAQ: [ KNDI ]) ranks as one of the largest manufacturers and exporters of go-karts in China, making it a world leader in the production of this popular recreational vehicle. It also ranks among the leading manufacturers in China of all terrain vehicles (ATVs), and specialized utility vehicles (UTVs), especially for agricultural purposes. Recently, it introduced a second generation high mileage, two seater three-wheeled motorcycle. A major company focus also has been on the manufacture and sales of a highly economical, beautifully designed, all electric super mini cars -- for neighborhood driving and commuting. Available in convertible and hardtop models, the COCO travels up to 60 miles at speeds reaching 25mph on a six hour charge. Kandi believes that battery powered, electric super minis will become the Company's largest revenue and profit generator. The Company's products can be viewed at [ http://www.kandivehicle.com ]. Its corporate/ir website is [ http://www.chinakandi.com ].

About The Alliance For Chinese Electric Vehicle Development and Commercialization ("the Alliance")

On January 4, 2010, Kandi announced it had forged an Alliance with major Chinese energy, IT and battery companies to help launch a new electronic vehicle (EV) era in China. The new business model of the Alliance addresses key hurdles to mass commercialization of EVs by reducing EV purchase costs, eliminating battery concerns and substantially increasing driving ranges. The new model envisions expansion on a city by city basis of its new model, key elements of which include: strong government cooperation, separating the sale of electric vehicles from the sale of batteries, construction of a comprehensive network of "battery stations" within each city for rental, repair, replacement and charging of batteries, and also, utilizing Kandi vehicles and patented and patent pending EV technology for easy removal and replacement of batteries. The core members of the Alliance are: Kandi Technologies Corp., China Potevio/CNOOC New Energy and Power Ltd. (a joint venture between China National Offshore Oil Corporation and China Potevio Co.) and Tianneng Power International, Ltd. Jinhua City, where Kandi is based, has been chosen as the first model EV city by the Alliance.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.