Denton Peng, who was once a successful leader in China’s solar industry, is now facing struggles in the United States (U.S.) electric bus market, says the FT.
Peng travelled to the U.S. in 2018 after purchasing electric bus manufacturer Phoenix Motor, but the company has recently been facing financial difficulty.
Shares of Phoenix are trading below $1 and there have been consistent company losses. Plus, only 40 electric buses have been delivered despite the company receiving $4.9 billion in U.S. subsidies.
The U.S. electric vehicle (EV) manufacturing market has been facing high labour costs due to insufficient supply chains, leading the way for cheaper Chinese alternatives.
Tu Le, Managing Director of Sino Auto Insights, told the FT:
“The United States will have a hard time getting to the cost level with China.”
Peng is reportedly considering building factories in China to produce components more affordably and serve international markets under an American brand.
Originally heading LDK Solar in 2005, Peng took on EVs after the company collapsed in 2012.
Analysts, like Pavel Molchanov, have suggested the U.S. electric bus market will take at least five years to mature, says the FT.
Outsourcing to China remains an economic solution, though it may face potential headwinds, especially if EV policies continue to be revoked under the new Trump administration.
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