Kandi Technologies Received $14.5 Million Subsidy from the Provincial Government
Kandi Hainan was granted a total of $43.5 million in a subsidy to support its research and development expenditures for a new electric vehicle model.
Shares in Kandi Technologies Group Inc. (Nasdaq: KNDI) soared more than 14 percent Wednesday afternoon to $4.14 per American depositary share after the electric vehicle maker said its wholly-owned subsidiary, Kandi Electric Vehicles (Hainan) Co. Ltd., received a third subsidy payment of $14.5 million from the Hainan provincial government.
According to the agreement, Kandi Hainan was granted a total of $43.5 million in a subsidy to support its research and development expenditures for a new electric vehicle model.
"Receiving our third subsidy is a strong indication of the Hainan local government's satisfaction regarding the progress of research and development for a new EV model and construction at the Hainan factory," said Xiaoming Hu, chairman and chief executive officer of Kandi. "We will properly allocate the subsidy funds to accelerate the production and development of the best EV products that are expected to exceed consumer demands in order to capture profits and expand market share."
The Jinhua-based company said it lost $6.5 million, or 13 cents per share, in the three months through September, in contrast to income of $1.9 million, or 4 cents per share, during the same period a year ago. The weak earnings report tanked its stock price and the company attributed the weak results to increased expenses for research and development.
With the new funding and full support from the local government, the management of the company feels optimistic of the future. "The company's operations are forecasted to improve," said Hu.