Shanghai (ZXZC)- Shanghai-headquartered EV startup REECH AUTO signed strategic cooperation and joint manufacturing agreements with Changan Automobile on May 24 in Chongqing. Under the agreements, both parties will co-manufacture the startup’s first mass-produced model code-named M500 at Changan-Suzuki’s second vehicle plant. 

Unlike the traditional partnership that is limited to production, two companies agree that the “co-manufacture” is essentially about the sharing of manufacturing resources based on controllable supply chain system, technology standards, manufacturing process as well as quality inspection system. The latest cooperation will let two participants involve in a number of links, such as the product certification & manufacture, the management & control of manufacturing quality, auto parts and logistics business inside the plant. 

The legal status of vehicle production outsourcing has been confirmed by China’s government after the National Development and Reform Commission issued the Provisions on the Administration of Investments in the Automotive Industry at the end of 2018. The fresh collaboration will help Changan Automobile vitalize its existing capacity, and quicken the pace of mass producing new EV products. 

Apart from the partnership with the automaker that has car building qualification, REECH AUTO has been constructing its own production base in Jiujiang, Jiangxi Province since last June. The self-owned base, covering a floorage of 300,000 square meters and involving a total investment of RMB5.5 billion, is expected to output 200,000 vehicles per year—100,000 units for the first phase. Besides, the startup will set up a marketing center and a logistics hub in Jiujiang going forward.

(Photo source: official website of REECH AUTO)

As the schedule proceeds, REECH AUTO will start to receive orders of its first mass-produced model, a compact all-electric SUV code-named M500, in the fourth quarter of the year.