Feb. 25 (Bloomberg) -- Kandi Technologies Group Inc., the Chinese electric-car rental company, surged to a record in U.S. trading after saying its service is profitable and that it plans to expand to the country’s biggest cities.
The stock jumped 16 percent to $15.56 yesterday, the highest close since its listing in 2006. The Nasdaq Composite Index gained 0.7 percent.
Kandi, together with joint venture partner Geely Automobile Holdings Ltd., provides electric vehicles for short-term hire using automated multilevel garages in Hangzhou. Rental rates start from 20 yuan ($3.30) an hour and covers the first 25 kilometers (16 miles), compared with the starting rate of 11 yuan for taxis.
“I have been meeting local officials from other cities who have been visiting our company almost daily in the past few months,” Kandi Chairman Hu Xiaoming said in an interview last week at the company’s office in Hangzhou, Zhejiang province. “They are very interested in our model and keen on promoting use of electric vehicles in their cities.”
The automaker’s shares have outperformed the Nasdaq this year after tripling in 2013, as China stepped up efforts to combat worsening air pollution and encouraged the adoption of electric vehicles. The world’s second-largest economy is lagging behind its target to have 5 million alternative energy-powered vehicles by 2020 because of a lack of charging stations and high costs.
Kandi is selecting local partners in Shanghai, Beijing and Chengdu, the capital of southwestern Sichuan province, Hu said, without specifying a timeframe. In Hangzhou, the company is working with the local government to add rental stations to public parking lots, hotels, department stores and high-speed train stations, he said.
It may take three to five years for the rental network to cover the entire city, Hu said.
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