China's proposed EV policy spooks foreign automakers

China’s government is considering plans that could force foreign auto makers to hand over cutting-edge electric vehicle technology to Chinese companies in exchange for access to the nation’s huge market, international auto executives say. Under the ministry’s proposed plan, foreign auto makers must form joint ventures with Chinese companies if the foreigners decide to produce key new-energy components, such as advanced lithium ion batteries and high-power electric motors, in China. It was said that the plan would cap foreign ownership in the ventures at 49%, giving majority ownership and effective control to the Chinese partners. Foreign companies now are allowed 50% ownership in most cases of ventures that make gasoline-powered cars. “We need to make sure we have a contract or agreement that allows us to continue to own and control the technology, even though we might be a minority stakeholder,” said one of the foreign auto executives. (September 16, 2010)