Ford no longer planning electric vehicle with China’s Zotye

Ford Motor has decided to terminate plans to start electric vehicle joint ventures with China’s Zotye Automobile, the American automaker said on Thursday.

It said that China’s electric vehicle industry and government policies went through significant changes since the agreements were signed in 2017 and 2018, resulting in Ford’s decision. Ford didn’t mention which changes caused its move.

Earlier week, Ford said its China joint venture with Chongqing Changan Automobile would begin making all-electric Mustang Mach-E vehicles.

In a statement on Thursday, Ford said it would go for a more “flexible business model in China” that would see it utilize its present operations in the country and elsewhere, and build related business centres.

Zotye did not immediately replied to a request for comment.

In 2017, during a visit by former U.S. President Donald Trump to China, Ford and Zotye said that they would invest a combined $756 million to set up a 50-50 joint venture in China for building small electric passenger vehicles.

A year later, the two automakers said they had signed a memorandum of understanding for another venture that would work on electric vehicles for ride-hailing fleets.

EV makers from home-grown Nio Inc to U.S. leader Tesla Inc have been expanding manufacturing capacity in China, where the government is heavily promoting greener vehicles as a means of decreasing chronic air pollution.

Sales of electric, plug-in hybrid and hydrogen-powered vehicles in China are forecast to increase to 20% of new car sales by 2025 from just 5% now, the State Council said in November.