The Wall Street Journal reports,''U.S.-based EcoMotors Inc., which says its engines offer as much as 20% greater fuel economy and are around 30% lighter than traditional engines, hopes it can play a role in China's efforts to combat pollution. Venture-capital firm Braemar Energy Ventures also is an EcoMotors investor''.
The joint venture initially will focus on building diesel engines in China. Such engines typically are used by trucks, for which China is the world's largest market. More than four million commercial vehicles—including trucks and vans—were sold in China last year. That was up 6.4% from a year earlier, though down from the record 4.3 million sold in 2010.
Trucks account for around one-fifth of China's vehicles but contribute a disproportionate share, almost 80%, of vehicle particulate matter, according to China's Ministry of Environmental Protection. Last year, the country pledged to increase fuel standards for diesel and gasoline over the next four years to levels similar to those in the U.S. and Europe.
FAW Jingye Engine Co. will hold 51% of the joint venture, which was signed last week, with EcoMotors owning the rest.
FAW Jingye will invest more than $200 million, according to Andrew Chung, a partner at Khosla Ventures. Instead of contributing capital, EcoMotors will provide intellectual property on a nonexclusive basis, he said.
