Chinese electric-vehicle maker selects Michigan for R&D center

A Chinese-affiliated manufacturer of electric vehicles plans to invest $10.7 million and create 150 jobs in setting up a research and development facility in Michigan in another sign of growing mainland investment in the state's major industry.

SF Motors, a subsidiary of auto maker and supplier Sokon Industry Group, one of the top 500 private companies in China, plans to establish the research R&D center in Pittsfield Township, about six miles south of Ann Arbor, home to the University of Michigan and about an hour's drive from Detroit.

SF Motors is based in San Francisco, which is near the well-known technology center Silicon Valley. Richard Wallace, director of transportation systems analysis at the Center for Automotive Research in Ann Arbor, said there is a reason why the company chose southeast Michigan over Silicon Valley for the R&D center.

"It's because they want to make cars and not just develop software and systems integration," he said in an interview. "They need access to engineers and technical personnel who can develop vehicles."

"Michigan is at the cutting edge of new automotive technologies as well as being an engineering powerhouse and we want to be a part of this great community," John Zhang, CEO of SF Motors said in a statement.

The investment comes as low gasoline prices are affecting US sales of electric and alternative-fuel vehicles.

Eric Dennis, also from the Center for Automotive Research, said in an email that continued interest in EV development has been driven by the success of Tesla Motors Inc. Noting that traditional small eco-friendly electric vehicles and hybrids have consistently underperformed sales expectations in the US, Tesla's unique strategy of marketing electric vehicles as luxury sports cars has stood out.

"Recently Tesla has attracted even more attention for introducing advanced driving automation features. Tesla hasn't yet demonstrated that they can continue to be successful as they scale-up, but they have certainly changed the perception of where electric cars fit in the overall vehicle marketplace. Now, several major automakers and aspiring startups appear to be moving towards introducing compelling luxury electric vehicles to compete in the market-segment Tesla has defined," he said.

The announcement of the SF Motors plans came on Nov 17 as Michigan Governor Rick Snyder is in the midst of another trade mission to China. He has been joined for part of the trip by Detroit Mayor Mike Duggan.

According to the Michigan Economic Development Corp, the state is the global center of automotive R&D, with 65,000 employed in more than 240 tech centers with expenditures topping $10 billion annually. Michigan's R&D investments exceed those of the other 49 US states, Canada and Mexico combined.

paulwelitzkin@chinadailyusa.com