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Hoping to capitalize on soaring valuations of EV makers such as Tesla Inc. and newer entrants like Nikola Corp. and Workhorse Group Inc., Wanxiang is selling stakes in Karma to private equity partners. The Hangzhou, China-based company is committed to Karma and sees the boom in EV-maker shares as an opportunity to attract other investors, said Pin Ni, president of Wanxiang’s U.S. business.
“Karma has real production, real technology and real dealers,” Ni said in a phone interview. “Look at Tesla’s value and you see Workhorse with their stock going up ten times recently.”
To help cover its investment costs, the automaker plans to leverage its EV platform by selling it to other manufacturers. The company said it will offer its drive motors, suspension, steering, battery and electrical and other systems.
“Investors aren’t rewarding you for just being a sports-car company,” Tarr said.
Karma is working on a deal with a commercial truck developer on a delivery vehicle and plans to have a prototype by the end of the year, Tarr said. If it does wade into the commercial EV market, Karma faces formidable rivals such as Rivian Automotive Inc., which is backed by Amazon.com Inc. and Ford Motor Co., as well as Workhorse, General Motors and Germany’s Daimler AG.
“The market will be pretty flooded with electric trucks,” said Sam Abuelsamid, principal research analyst at Guidehouse Insights. “There will be a lot of competition.”