Taiwan Electric Car Entrants Aim to Build Ties with U.S. Automakers at June Event

Taiwan companies, which have supplied many of the key components used in the world’s first electric cars and are emerging as important players in this infant industry, are aiming to build closer ties with U.S. automakers during an event taking place during June 21-25.

“EVs are a new game for everyone”

To help build links between Taiwan and the U.S. in the electric vehicle (EV) industry, Taiwan’s Ministry of Economic Affairs (MOEA) has organized the Taiwan Automotive International Forum and Exhibition (TAIFE) taking place in the U.S. cities of Detroit, Indianapolis and Los Angeles during June 21-25. The event will provide a unique opportunity for U.S. and Taiwan companies to build alliances.

Taiwan companies such as Chroma, Whetron and Molicel have provided key parts such as batteries, inverters and electronic systems that have been used in electric cars from BMW, Mitsubishi and Tesla. The Taiwan companies aim to combine their expertise in IT and electronics to enter the fledgling EV industry that’s expected to take off around 2015.

“EVs are a new game for everyone,�?? says William Chang, senior manager of corporate marketing for Chroma. “There are a lot of opportunities for Taiwan companies to support U.S. automakers.�??

One of the companies joining the TAIFE event, Taiwan’s Yulon Group, is preparing to launch its own electric sports utility vehicle (SUV) within the next 12 months. Most of the components for Yulon’s 100 percent electric Luxgen SUV, including information technology and other electronics systems, are also from Taiwan suppliers.

“Taiwan has excellent integration capabilities,�?? says Chun-Chung Lee, executive vice president of Haitec, the R&D unit of Yulon Group.

Taiwan’s production of auto electronics will be worth NT$100 billion (US$3.2 billion) in 2010 and increase to NT$300 billion by 2015, according to Taiwan’s MOEA. The main products include telematics systems, automobile lights, light-emitting diode (LED) headlights, reverse parking systems and tire pressure monitoring systems (TPMS). Taiwanese companies also have huge potential in airbags, car alert systems, keyless entry, engine lock chips, navigation systems and infotainment systems.

Taiwan has many companies entering the electric car industry. E-One Moli Energy Corp., supplied the lithium-ion batteries used in BMW`s MiniE electric car. Fukuta Elec. & Mach. Co. supplies electric motors for the Tesla Roadster, BMW`s MiniE and the Luxgen electric car.

Production of electric vehicles is predicted to soar in the next few years. Approximately 1 million EVs are expected on the road in the U.S. by 2015 with five times that many expected by 2020, according to the Rocky Mountain Institute, a U.S.-based research group.

Markets in Asia and Europe are expected to grow at a similar pace. Billions of dollars are being invested globally to develop and promote electric vehicle technology, including almost US$3 billion from the 2009 American Reinvestment and Recovery Act.

Earlier this year, Underwriters Laboratories Inc. (UL), a world leader in product safety testing and certification services, signed a letter of intent with Taiwan’s globally renowned Industrial Technology Research Institute (ITRI) to develop testing technology and specifications for power systems in electric vehicles. UL and ITRI also aim to develop safety tests for long-term aging of lithium batteries and solar power generation systems.

IPOs Likely to Slow Ahead of Fourth of July Holiday

If you blinked last week, then you missed seeing the busiest five-day period that the IPO market will likely experience this month.

A total of five initial public offerings of stock began trading from Tuesday through Friday, and that is about as good as it is going to get for a weekly count in June. With just eight business days left in the month, things are expected to be slower through this week and the first half of next week, with more companies waiting to see what the market looks like after the Fourth of July holiday before launching their deals.

"I would expect that was our busiest week this month," said Bill Buhr, head of research at Morningstar Inc. "There's still a lot of uncertainty in the markets."

Although there isn't much data to go on—just six deals in total for the month so far—IPO performance in June is actually shaping up to be a better month than May.

Only one company, Nobao Renewable Energy Holdings Ltd., pulled its IPO after failing to be priced, compared with a half dozen in May. (Other deals also got shelved in May and June, but they had been sitting around for months and hadn't been scheduled to be priced.)

Three deals out of six traded higher on their debuts in June, compared with four out of 11 in May; two deals ended their first day essentially flat in May, while one did so in June. CBOE Holdings Inc. rose 12% after pricing at the high end of its range last week, the first deal to price that well and then trade higher since PAA Natural Gas Storage LP in April.

Despite the CBOE's success and a gain of 19% from banking company Higher One Holdings Inc. during its debut on Thursday, no one is expecting a rush of new offerings for the rest of the month.

"Favorable performance of IPOs from [last] week may help to improve the tone of the market but will not be enough to impact deals in June," said Scott R. Cutler, head of listings in the Americas for NYSE Euronext. "However, it will help to try and push deals out the door in July," with as many as 10 companies trying to access the market.

Ten deals in a month would have been a pittance in 2007 before the economic downturn, when it wasn't uncommon to see twice that number in a busy month. But it is definitely an improvement over last July, when only one company made it out the door, or even June 2009, when three did.

Looking ahead, there is some positive chatter about electric-car maker Tesla Motors Inc.'s debut next week, but not much else. This week, just one deal is expected, from optics-manufacturing specialist Fabrinet, which first filed to go public in July 2007.

German and China invested in manufacture of electric car

Automakers BYD of China and Germany's Daimler agreed last month to invest a combined 600 million yuan to form a joint venture to manufacture electric cars. It is BYD's second green car joint venture, after partnering with Volkswagen in May 2009. In April of this year BYD debuted an electric car called the E6 that can be recharged at home. Because of its achievements, BusinessWeek magazine ranked the Chinese company at the top of its Tech 100 list of the world’s most promising IT companies.

Last month, Nissan CEO Carlos Ghosn announced that his company intends to become the world's leading electric car maker. He made the comments at a groundbreaking ceremony in Tennessee for a US$1.7 billion plant that will produce electric cars and batteries. Staring in 2012, the plant will roll out 150,000 Leaf electric cars a year, gaining a major foothold in the U.S. green vehicle market. The Leaf can travel up to 160 km on just one charge and hit speeds of up to 145 km/h. Nissan has already received some 20,000 advance orders in Japan and the U.S. for the car that is planned to hit showrooms at the end of the year.

Competition is intensifying in the global market for electric cars, and Japanese and Chinese carmakers are leading the way. Around 158 Japanese companies, including Fuji Heavy Industries, Mitsubishi, Nissan, Toyota and the Tokyo Electric Power Company, recently established the CHAdeMO Association, which aims to increase quick-charger installations worldwide and standardize charging formats.

Tokyo and Beijing have rolled up their sleeves to develop their green auto industries. China's Finance Ministry has begun offering a subsidy of 60,000 yuan for each electric car purchase in five cities including Changchun, Shanghai and Shenzhen. The Chinese government has set aside 10 billion yuan to subsidize electric car purchases and plans to set up 6,209 charging stands in 27 cities by the end of this year. Japan is offering 70,000 yen in subsidies to buyers of low-speed electric cars with speed limits of up to 60 km/h, and 1.39 million yen for faster ones. Korea's e-Zone low-speed electric car, which is being exported to Japan, is subject to these programs.

But Hyundai Motor, Korea's largest car maker, is lagging behind in the race. The Korean company will roll out a mere 30 units of its i10 electric car this year and plans to produce only around 300 to 500 next year. That pales in comparison to Nissan, which aims to sell 50,000 Leaf electric cars in the U.S. starting at the end of this year, and Mitsubishi, which is targeting sales of 9,000 i-MiEV electric cars in the U.S. and Europe. The Korean government plans to let high-speed electric cars go through a trial period in August before offering subsidies for buyers. But such subsidies will not be available until after next year. At this rate, experts say, local small and mid-sized electric carmakers will end up going bankrupt, pushed out by rapidly-expanding Chinese and Japanese rivals.

The global market for electric vehicles is expected to rise from 740,000 units last year to 1.29 million by 2020, according to JP Morgan. But if the Korean government and businesses continue their lukewarm approach, their aspirations to claim a 10 percent market share and emerge as one of the world's top four producers by 2015 will fall flat.