Bill Gates-Backed EcoMotors Sets Up Venture With FAW UnitBloomberg News
EcoMotors Inc., backed by Bill Gates and Khosla Ventures, formed a partnership with a subsidiary of China FAW Group Corp. that will build a $200 million factory in China.
The joint venture will develop, make and sell EcoMotors’ engine technology, which the Allen Park, Michigan-based company says improves fuel economy and lowers greenhouse-gas emissions. FAW Jingye Engine Co. will invest more than $200 million in the factory, which will make 100,000 engines annually in Shanxi provice from 2015, according to an e-mailed statement.
China’s leadership has said it will “declare war” on pollution and is working to shut coal furnaces and phase out 6 million vehicles that don’t meet environmental standards. Beijing and Shanghai have been covered in smog as pollution levels there exceeded levels considered safe by the World Health Organization.
“For customers in China, it will ultimately provide access to affordable technology that will have a positive influence on the country’s transportation emissions,” Amit Soman, EcoMotor’s president and chief operating officer, said in the statement.
FAW Jingye will hold 51 percent of the joint venture, with EcoMotors owning the rest. FAW Jingye is a joint venture between state-backed FAW Jiefang Automotive Co. and Beida New Energy Investment Fund Management Co., according to the statement.
FAW Jiefang Automotive is the heavy truck business unit of China FAW Group, which builds the Red Flag limousine that’s being revived to regain its standing as a car used by the nation’s leaders.
EcoMotors signed an agreement last April with another Chinese company, Zhongding Power, to manufacture engines in China’s Anhui Province.
In 2012, the company said it raised $32.5 million from investors led by Braemar Energy Ventures. Gates, 58, and Silicon Valley venture capital firm Khosla Ventures also participated by increasing their investment, EcoMotors said, without providing amounts.
The initial investment by Gates, Microsoft Corp. co-founder and the world's richest person, was in 2010. The Menlo Park-based firm led by Sun Microsystems Inc. co-founder Vinod Khosla, 59, was a founding investor in EcoMotors, which was started in 2008. Oracle Corp. subsequently bought Sun Microsystems.
Khosla Ventures has invested in sustainable energy companies such as biofuel plant producer Kior Inc. and power electronics equipment manufacturer Varentec Inc.
EcoMotors’s opoc engine uses opposed pistons and cylinders that improve fuel economy and lower greenhouse-gas emissions by as much as 50 percent compared with conventional motors, according to the company.
— With assistance by Alexandra Ho