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Arthur Porcari  

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  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    For those who “question” the business sense in the current structure of the ZZY business model, let me put it in perspective with some facts and anecdotes learned by the Investor contingent which included myself that visited the Company in China late 2013.

    But first let me remind what has been much talked about in the China media but not so much over here re. ZZY and its ability to make money from the two CarShare Programs, long lease and hourly rental.

    Anyone who would take a few minutes to research ZZY and the Carshare in the China Media would realize that ZZY has made it clear that they would be offering initial discounts in both programs when they first start a program in each city. Not an innovated thought, just good business sense as I am sure you would agree. The prices being debated here by our serial commenter are NOT the prices that will carry the program forward. But there is something else that should be taken into consideration, but not so easily discovered in the China Media.

    When we visited the Company in late 2013, one afternoon while we were having lunch with KNDI CEO, Mr. Hu, I asked Hu; “What do you anticipate the commercial life of the CarShare EV will be?” Hu responded; “Current thought, three years, and then they will “recycled”

    I followed up with; “You mean reconditioned?”, He said; “No, it is the current thought to just take them out of service and ‘melt them down’ and reuse the materials to make new cars”.

    I said; “But wouldn’t they have a much longer life, particularly since they will be properly maintained by ZZY?” He said; “sure, but at current there is no desire to sell any of the CarShare type EV’s, new or used to individuals and by that time we will have much more advanced EV’s in both look and technology and intend to have the new cars in service. Plus, past the initial subsidies for purchase, there are additional ongoing subsidies available which all expire after three years, so from a business model point of view, our thought is to recycle the cars”

    I then said; “for that to make sense, you must believe the new EV subsidy program is going to last more than the 2017 the announced end to the PRC program?” He replied; “Yes, I believe it will last until at least 2020.”

    Now maybe he is just “omniscient”, but a couple of months ago the PRC did announce the subsidy program will be extended until at least 2020. An impressive guess on his part at that time? I don’t think so and neither does anyone else who has followed and done some basic DD on KNDI over the years. All you have to do is look at Mr. Hu’s US bio to realize that he is Very well connected and respected by the top levels of the PRC government as an EV expert and that goes back to well before KNDI developed its first EV.

    A you can see from his bio I pasted below, In 2003, five years before KNDI introduced its first EV, Hu was elected by the PRC to be Project Manager and Chief Scientist” for PRC State 863 Plan regarding the development of alternative energy vehicles for China in the Future. The PRC knew that as its mass population mobilized, ICE cars were not a viable option so they tapped Hu, who at that time was GM (President) of the battery division of Wanxiang, the World’s largest manufacturer of Auto Parts, to lead the team. The respect by the PRC continues as he was recent asked to join a China Delegation to visit Tesla’s Freemont facility in November as its EV expert. (this the day before the KNDI Shareholder Meet and Greet held in San Francisco)

    Hu, Xiaoming
    BRIEF BIOGRAPHY
    Mr. Hu Xiaoming serves as Chairman of the Board, President, Chief Executive Officer of Kandi Technologies Corp., Since june 2007. Prior to joining the Company, from October 2003 to April 2005, Mr. Hu served as the Project Manager (Chief Scientist) in the WX Pure Electric Vehicle Development Important Project of Electro-vehicle in the State 863 Plan. From October 1984 to March 2003, Mr. Hu served as: (i) Factory Director of the Yongkang Instrument Factory, (ii) Factory Director of the Yongkang Mini Car Factory, (iii) Chairman and General Manager of the Yongkang Vehicle Company, (iv) General Manager of the Wan Xiang Electric Vehicle Developing Center and (v) the General Manager of the Wan Xiang Battery Company. Mr. Hu personally owned 4 invention patents and 7 utility model patents, which he transferred to the Company in fiscal year 2012. Mr. Hu’s experience as our Chief Executive Officer and President, as well as Chairman of the Board, and extensive scientific and operational knowledge and expertise qualifies him to serve as Chairman of the Board and led the Board to conclude that he should be nominated to serve another term as a director.

    http://reut.rs/1zPlqVp

    Now I am sure that KNDI’s detractors will try to make something sinister about Hu’s high level contacts, but nothing is going to satisfy them anyway.

    Hopefully this will answer most of the above questions about the KNDI JV and ZZY business plans.
    Feb 3, 2015. 08:46 AM | 6 Likes Like |Link to Comment
  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    Qsymia- Trust me, It was not I.
    Feb 3, 2015. 07:13 AM | Likes Like |Link to Comment
  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    SerrCo- I have long ago made my "argument" for KNDI and its related business model and my readers know it. Contrary to you, I do have another life besides babysitting my article. Others seem to be doing a more than adequate job chasing around and debunking the nervous ramblings of someone as yourself who invents conflict where there is none.

    My bigger problem with this particular blog is justifying to the several participants that have SA Messaged me as to why I am letting you "hijack" the comments with your repetitive chase for minutia.
    Feb 3, 2015. 07:05 AM | 8 Likes Like |Link to Comment
  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    wahlaz- Makes one wonder how easy it must be to get through Harvard Law School when he can spend 20 hours a day blogging, tweeting and commenting about his 1000 share short position. :-)
    Feb 3, 2015. 06:56 AM | 5 Likes Like |Link to Comment
  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    SerrCo- Lets see if I understand your answer. In your last feeble attempt at hurting the stock with an attack article last Tuesday, which seems to have failed miserably, you concentrated on accusing the JV of numbers "fabrication" at the hands of Mr. Hu.

    But now you have expanded your rant directly to "Li Shifu "might" be in on "any" accounting fraud at Kandi.

    What's with the "might be" and "any" in that sentence? A "weak" phase and a "weak" word. Are you starting to lose confidence in your formerly definitive stance?

    Are you aware that just a week or so after Geely struck its JV with KNDI, it also struck another EV JV with US based Detroit Electric? Probably not, but not surprising, Hasn't worked out to well.

    KNDI detractors made a big issue of that deal as well. Here is an article circulated at that time

    Detroit Electric to Partner with Geely in China
    At the Shanghai Auto Show on April 25,

    Detroit Electric, a start-up electric-car maker, said it will form a joint venture with Zhejiang Geely Holding Group Co. to develop electric vehicles to sell in the Chinese market. The two companies are jointly developing an electric version of Geely’s Emgrand EC7, which is a compact sedan similar to a Honda Civic. The electric car will be called the Emgrand EC7-EV and will go on sale under the Geely brand in the first quarter of 2014. The model is expected to offer a medium-range (up to 165 km per charge) and a long-range (up to 258 km per charge) option. Detroit Electric and Geely expect say they expect sales to reach 3,000 in the first 12 months and 30,000 in the first three years the car is on the market. Detroit Electric will manufacture components for the electric car near Geely’s headquarters in Hangzhou, Zhejiang...

    http://bit.ly/1K1XvTV

    BTW, Are you aware that the latest KNDI-Geely JV car approved by the MIIT is the K-30, an EV version of the Geely E7 that was turned over to KNDI to convert?

    http://bit.ly/1K1XvTX

    And here is a quote from this recent article out in the past couple of weeks:

    "Geely at the beginning of 2014 had announced the next five-year strategic plan for the new energy vehicles will develop during pure electric cars and hybrids. In the ensuing years, the release of the new EC7 EV technology to the joint venture company with Condi electric car company.."

    http://bit.ly/1K1Xy1X

    If you were a Business College Student instead of a law student, you might have learned what Li Shufu is teaching with this subsequent JV and that is a time proven business tactic to join or acquire a "potential" future competitor before he has a chance to "muck up" your business plan.

    The Company Geely recently JV ed with has been in the EV development business since 2006, three years before KNDI introduced its first EV, yet has only received MIIT approval on one EV, and that EV has been sold only in the export market as of now. This compared to 9 KNDI exclusive plus 3 KNDI Geely jointly developed for a total of 12 EV cars and trucks developed by KNDI.
    Feb 2, 2015. 01:08 AM | 12 Likes Like |Link to Comment
  • A "Non-Event" Jan. 30th That Could Quickly Spell Bad News For Kandi Technologies Short Sellers. [View instapost]
    SerrCo- Before I allow you to continue to clutter up MY blog, I want a well thought out response from you for this portion of my above article. I asked you this on your attack article and you chose to ignore it. (As you can probably tell, I am also not happy that ALL of my comments totally debunking your fantasy fabrication on your first attack article were removed.)

    BTW, Don't bother putting up any more comments to other posts until you fulfill this request as I will just delete them. I will give you one hour to respond, should you choose to ignore or make some obfuscated response, after the hour is up, I will take down all of your comments.

    "1. KNDI's JV Partner Geely Auto and its Founder CEO Li Shifu would have to be equally liable as a "co-conspirator", a very dangerous situation for either Hu or Li with President Xi JingPing's campaign in high gear to wipe of business fraud and corruption, particularly in light of the PRC government alone handing over a subsidy check for around $8,100 for each JV car claimed sold. (for some reason the attack writer has avoided including Li in his accusations.)
    Feb 1, 2015. 11:49 PM | 9 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Ownen- To Respond

    1. A true statement except for the last two points. The Company reported numbers are important otherwise your first point in your first comment could not be measured and I don't see any comment where more than maybe one suggested it be bought.

    2. Basically true regarding the JV. All car companies do sell cars except under the current business plan the cars are sold to both the provided leasing Company which also just happens to be a small minority investment by the JV.

    3. While he claims he is short the stock, who knows but what difference does that make? Personally, he would have to be an idiot to waste time doing such an article unless he was either short or got paid to do it. But the reason his comments should be questioned has nothing to do with him being short. It is that what he says is at odds with what the Company says. And that is the shorts conundrum. What we have here is a "He said, She said" between the Company and its reports and some Westerner who is giving an opinion without anything more then weak apparently cherry picked circumstantial evidence. Its up to the investor to make his own choice, but IMO, no investor should have money at risk in any Company that they don't believe is candid with what the Company reports.

    4. Have no idea what you mean by this

    Regarding your closing comment; This comes under point 3 above. The Company reported numbers (which is more than TSLA has yet to do at this late date) and he doesn't agree with the numbers based on his own select circumstantial evidence.

    Bottom line: It is a stock trading on a stock market. For every happy buyer, their is a happy seller on the other side of the trade. Each side made a decision based on whatever reason they chose.
    Jan 29, 2015. 07:13 AM | 7 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    So what you want your readers to believe is that the GeelyCEO and controlling shareholder of China's largest Passenger Car maker, who would receive 50% of the benefits of the JV would let KNDI's CEO make a co-conspirator out of him to cash in a a few EV's?

    Read my comment below to Dudette regarding why Li Shifu stepped down as JV Chairman and also signed an additional non-competitive JV.
    Jan 27, 2015. 04:52 PM | 11 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Ezra-is your short in trouble? NASDAQ Short Interest just out after the close. Up 135,000 to 7.75 million or 27% of the float with a Record 9.3 Days to Cover.

    How do you feel you did with the stock in a 300 point down market only giving back a dime more than it went up yesterday, a "flat" day in the market with no company news out.

    Now I know that often short sellers with a big problem often resort to crossing stock from one account to another by using "Market on the Close" for both buy and sell. Yesterday we saw a 174,000 share market on close which was 20% of the total days volume and today we see a 246,000 Market on close which was 30% of the whole days volume. Sure looks fishy to me. You don't think some short who doesn't have to report to anyone is trying to scam long investors do you?
    Jan 27, 2015. 04:20 PM | 11 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Ezra- I know I have asked you this before but have never received an answer in different venues, but to be specific here, since you have made this comment the "linchpin" of your whole article. You said and I quote "The point of the article is that nearly all of Kandi's "sales" have ultimately been to a subsidiary that is controlled by Kandi's CEO". That seems to be pretty definitive, and not the words of an "opinion" on your part? Or are you just trying to pull the wool over the eyes of innocent investors?

    Other than a figment of your imagination, what if any evidence do you have that you can provide your readers that ZZY is controlled by Kandi's CEO?
    Jan 27, 2015. 03:21 PM | 10 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Tom, before you make stupid comments like "it could have been created especially for Kandi" You of all people who claim to be an expert on "Green" should know that the "Global New Energy 2014" Conference, is the single largest Green Conference in all of China. Additionally,

    What would be KNDI's motive for "buying" the honor. They didn't even put out a PR on it.

    Now other than Ezra, what makes you feel it "seems" that ZZY is funded by KNDI? Since it is just a speculation on his part anyway with no evidence whatsoever, why is it you don't seem to feel that it is also Funded by Geely?
    Jan 27, 2015. 03:07 PM | 13 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Was Sino-Forrest receiving cash subsidies from the PRC?

    In the KNDI-Geely JV case National Government payment are approximately $8100 or approximately 33% of the $21,500 per car. And an equal amount paid to ZZY from the local Governments? Thus making the ZZY or other leasing Companies cost of the completed EV $6000 per car, or a small $60 million downstroke per 10,000 cars.

    Why is it the author doesn't remind his readers of these subsidies and how dramatically they reduce the purchase price for these EV's?

    Do you really think the PRC Government auditors are not verifying that real sales are being made before writing these huge Checks?
    Jan 27, 2015. 02:50 PM | 5 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Ezra- Question for you. You seem to have a hang up that KNDI might be running a "scam" through the JV and ZZY. Am I correct?

    If so, Do you think that Geely's Founder/CEO is part and party to this "scam" since you seem to agree that KNDI only owns 50% of the JV?
    Jan 27, 2015. 02:36 PM | 6 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Dudette- KNDI ended last quarter in its strongest financial position ever. $70 million in cash up from $13 million YE.

    http://1.usa.gov/1yfmflb
    Jan 27, 2015. 12:34 PM | 13 Likes Like |Link to Comment
  • The Potemkin Parking Lot: Related Party Transactions And Questionable Revenue Recognition At Kandi Technologies [View article]
    Dudette- As in the case of US corporations, When first incorporated often "Placeholder" Chairman and Presidents are put on initial documents. In the JV case, Li Shifu filled the Chairman spot and Mr. Hu the President (GM) back in early 2013 when incorporated.

    In Q1 2014 when the JV went into operation, as planned, Shifu stepped down, Mr. Hu move up to the Chairman Position and Liu Jinliang, Founding SVP of Sales and Marking of Geely, and currently Executive Director at Geely Automobile Holding, was made President (GM) of the JV. Here is his Bloomberg bio.

    "Mr. Jin Liang Liu has been General Manager of Shanghai Maple Automobile Co., Ltd. (SMA) at Geely Automobile Holdings Ltd. since February 2007. Mr. Liu has been the Head of Production -Shanghai at Geely Automobile Holdings Ltd. since March 5, 2007. He serves as the Chief Executive Officer of Shanghai Maple's operations, including Shanghai Maple plant and the newly set up Shangahi LTI joint venture. He is responsible for the overall management of Geely Holding's manufacturing facilities in Shanghai Mr. Liu serves as the Vice President of Zhejiang Geely Holding Group Co., Limited and General Manager of Zhejiang Geely Automobile Sales Co. Ltd. He served as the Head of Sales and Marketing of Geely Holding. Prior to joining Zhejiang Geely Holding Group Co., Limited in 1995, he held a number of management positions in several major hotels in China. He has about 10 years experience in the marketing and sales of motor vehicles in China. He has been an Executive Director at Geely Automobile Holdings Ltd. since June 9, 2005 and is responsible for all the sales functions of Zhejiang Geely JV in China. Mr. Liu is graduated from the Capital University of Economics and Business, focusing on industrial management."

    "http://bloom.bg/1BkiPgZ

    And in the recent below article you can see where he Officiated at the opening of a Carshare location at the PRC Science & Technology location. Here is a small quote from him at this ceremony.

    "At the launch ceremony, Condi Electric Vehicle Group Co., Ltd. President Liu Jinliang introduced "micro bus" of the relevant circumstances. According to reports, "micro-bus" project since the trial run, the majority of users, the country has formed a large influence, as of now, "micro-bus" project has been put on nearly 9,000 units in Hangzhou, has been put into operation can charge for electricity smart parking garage rental points 5, flat site 30."

    http://bit.ly/1BkiRFA

    It is quite a stretch to make anyone believe that Geely has any interest in breaking up the KNDI Geely JV. Aside from the fact that the JV has generated some $5 million in net income on $127 million in revenues and $6.7 million in profits for its first three quarters of operations; a feat which any JV partner in any business on any Continent would be ecstatic with.

    10Q Pg. 40
    http://1.usa.gov/1yfmflb

    Q4 the JV should add another $80 million in sales for a total of around $210 million for first full year of operations. another amazing accomplishment.

    And here is a quote in the Zhejiang Daily Newpaper Jan 6th from Li Shifu about his feelings for Hu Xiaoming.

    "Create a "micro bus" of Hu Xiaoming

    Hu Xiaoming is my good partners and good friends. His path to the development of electric vehicles in China has a very clear understanding, we were looking at the "micro-bus" from ideal to become a reality, the electric car will be the future of the automotive industry. Xiaoming is an "old car people", and has been a breakthrough Chinese electric car industry and marketization of dreams, this feeling, I agree, is also very supportive."

    http://bit.ly/1BkiPxe

    the New Geely JV is not a competitor of the KNDI Geely JV, since its single approved EV (compared to 14 for KNDI) is being sold to individuals only and to date all exports. Shifu wanted to get a piece of Xin Dayang's foreign business, where they sold some 7000 mini-evs last year but at the same time keep them from ever competing for the carshare/leasing business in China. Its just good business sense to keep possible future competitors within your grasp in the best interest of all players.
    Jan 27, 2015. 12:32 PM | 17 Likes Like |Link to Comment
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