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By: AllPennyStocks.com
As the outrage continues over spilled oil in the Gulf, the battle cry continues
to sound for alternative fuels, and development of alternate modes of transport
to those vehicles that run solely on fossil fuels. Electric cars have captured
the public’s imagination, if not that of legislators, and a California company
made a lot of noise last week by expanding its presence via the acquisition
route.
In the first full week of July, Santa Rosa-based ZAP (OTCBB:ZAAP) announced
agreements with Jonway Group, to pick up 51% of Zhejiang Jonway Automobile Co.
Ltd. as part of a strategy to capitalize on the growing automotive and electric
vehicle (EV) market in China.
According to the terms of the definitive agreements, ZAAP will acquire 51% of
Jonway Auto for $29.03 million U.S. in cash. In addition, ZAAP will acquire
exclusive international distribution rights to Jonway's automobiles for
approximately 31.5 million shares of ZAP's common stock (valued for purposes of
the transaction at $1 U.S. per share).
It’s something of a coup for ZAAP; Jonway reported annual revenues of
approximately $40 million U.S. in 2009 and about $20 million U.S. for just the
first quarter of 2010. The sale effectively renders Jonway Auto debt-free upon
closing.
The ZAAP-Jonway merger accelerates cost-effective manufacturing of ZAAP's
electric vehicles and gives ZAAP access to the Chinese market through Jonway's
distribution channels of more than 80 factory direct dealerships that feed into
hundreds of factory authorized dealers. Jonway's volume manufacturing capacity
gives ZAP a strong manufacturing base with the means of commercializing its
innovative EV technologies.
As part of this wave of excitement, another electric car company jumped into the
fray; Palo Alto-based Tesla Motors (Nasdaq:TSLA) enjoyed a sparkling IPO on June
29, debuting at $19, even reaching a high of more than $30 the next day, before
settling at its current $17 level, as the volatility continues in markets in
general and the small cap arena in particular.
TSLA unveiled its revolutionary Tesla Roadster 2.5 in early July in England,
featuring improvements in design and technology, including a new front fascia,
rear diffuser, improved seat comfort, sound dampening and an optional large
touch screen navigation system with back-up camera.
ZAAP engages in the development, acquisition, and commercialization of electric
vehicles and electric vehicle power systems in the United States. Its products
comprise three-wheeled personal transporters and off-road vehicles.
As for ZAAP’s stock fortunes, the Jonway deal proved just what the company
needed, as its price hit a new 52-week high on July 8 of 57.5 cents, after
scraping down to 17 cents in mid-December. As the vroom-vroom builds in the
electric car industry, these electric car Companies could really step on the
accelerator.
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