I should add that this is from my hand written

I should add that this is from my hand written notes, and is how I wrote what was said. Because of this, there may be five slightly different versions of the meeting. Our driver and interpreter, Gerry, did a fine job and is to be commended highly for his efforts. (Daisy speaks the other dialect used in China , and has not lived in China for many years. Hence, she was not able interpret at the meeting.)



We met with Mr. Hu on the very first day of our visit. After finding the Corporate Offices in Hangzhou we had about 4 hours of Mr. Hu’s undivided attention. After introductions by Harris and a presentation of two gifts by Tom, we got down to the actual meeting.



Mr. Hu first had a Power Point presentation for us to view, with him presenting the commentary. The presentation was, IMO, very basic but adequately explained Kandi’s business model. (He did not know our knowledge level, so kept the presentation to the novice level to give us an introduction to the business.) The presentation explained the reasons for Electric Vehicles: pollution, inadequate parking, traffic congestion and the need to import oil to fuel the cars. ICE restrictions will limit the number of new cars on the roads, but EVs will not be restricted. One point that I found very telling is that unrestricted growth of autos will choke cities and restrict city growth. Last year there were 1.17 million in HangZhou , and the policies are expected to restrict growth to 12% per year. The same problems are occurring in all of China ’s cities, not just HangZhou . Waste of parking, waste of vehicle usage, 90% of time a vehicle is parked and not driven, and when driven 70% of that time only one person is in the car. This is the rational for the Micro Bus Project.



Barriers to EV adoption: price, battery, limited mileage, long recharge time, incomplete grid, potential battery disposal problem. Misleading conceptions: Production of EVs, and EV to fully replace ICE; also price point of EV not competitive with ICE.

There are four ways to solve, or at least alleviate the public transportation problem: Subway, Taxi, Bus, and Micro Bus. Commercial mode must be adopted for EVs.



6 hotels now have flat car share. (We actually visited one of them while I was there.)



Mr. Hu paused at the Urban Beauty part, explained that all controls would use a touch screen and would be using anti collision technology. He also said 5 or 6 new models would be introduced.



All R&D would now be done at the JV. A part of the presentation we viewed showed examples of flat parking, underground parking, vertical garages, and business and community car share.



Government must take to lead in development of an integrated urban transportation system. At the present there is no specific organized government plan. He fully expects that government entities will be using the pan as envisioned and presented to them by Kandi. Of vital importance is that he will not enter a city without that city first passing legislation. (He did not expand on this); he expects Nanjing to be the first to pass such legislation.



He fully expects other companies to follow Kandi’s lead, but we have a 2 year head start.



Next year we will shock the world with EV production



Mr. Hu states that he feels very fortunate to be aligned with Geely



The above represents some of the discussion associated with the Power Point presentation we viewed, as well as the narrative. The Presentation was an earlier version of the one posted today by Kandi as part of the meeting in San Francisco . But, it was not as professionally done.



The next part of the meeting consisted of discussions on topics. My notes consisted of the following:



He fully expects a battery breakthrough in the near future. QBX is not dead.



We are still building 32 flat car share sites, to a maximum of 672. 4 towers are currently in use, with 10 being built. There are 16 hotel sites at the present time. Cities other than HangZhou may provide government support before HangZhou . (My read on this is that he is disappointed with HangZhou ’s lack of progress. He did not seem at all angry, just disappointed.) The serviceable life of a car used in car share is longer than 5 years, but the battery must be replaced between 3 and 5 years.



We may eventually acquire 70% of ZZY, but not now as it is still operating at a loss. ZZY may be independently listed in China in the future. ZZY is now experimental, may get government support in the future.



Fee for Community car share vehicles is 800 RMB/car/month. Customer is now responsible to provide charging equipment. Feedback has been positive due to low usage cost. Several thousand cars ar out there now for group lease. Companies have signed up for Corporate lease. We expect to manufacture 25,000 cars this year.



Hainan Island pays attention to the environment. They may prohibit ICE in total. The factory on this island is under construction now. We may build Beauty and Cowboy there.



Rugao factory is under construction.



At the time of our visit He mentioned a possible visit to NYC in Nov, but it appears that San Francisco was the location instead.



I took no notes during the factory and car share location visits, as I was taking videos. I have had DVDs made of the videos, with each of the participants getting one, as well as Aaron Rockett. My hope is that Aaron will use it to produce a documentary on EVs in general, and highlight Kandi and China as examples of what is being done.



I do not have the computer expertise to place any of the DVD material on the Web. I hope one of the other members will select parts and place on utube for viewing. I am not looking for recognition or payment for any of the videos placed there.



This concludes all I have to say. Unfortunately I had to leave the group 2 days early, as I had to accompany Daisy to HongKong where we met all her friends.



The pollution in all of China is bad. While at an attraction called Window on the World the wind shifted. The pollution level went from slight to bad in the space of 15 minutes. While on a bus outside of HongKong I looked in the direction of the Disneyland park. I could barely make out the cable cars traversing between hills in the distance. When I was there 4 ½ years earlier I had no trouble viewing the bridge the bus was on from the cable cars. The pollution has gotten that much worse.