It’s cute. It’s electric. The price is low. Will it sell?
South Korean manufacturer CT&T announced that they are investing US$21 million in an electric car manufacturing plant in Duncan, South Carolina. This is the first American plant for the eight-year-old company, which manufactures small cars targeted for university and other large sites requiring vehicle fleets.
CT&T chose South Carolina for its American operations in part because the company has already sold cars in the region, especially in the low country, where the car can navigate well in coastal and island towns where the maximum speed is strictly set at 25 miles per hour. The company is also in talk with local universities to create research and development relationships, and already has large clients including Duke Energy.
The car, named the C-Zone, reaches a maximum speed of 45 miles per hour, and is equipped with a lithium-ion battery that allows for a range of up to 70 miles per charge. Some may dismiss the car for looking like a retrofitted golf cart, and that has an element of truth since manufacturing golf carts is how CT&T got its start. But CT&T is betting that urban commuters and fleet managers will find the C-Zone an attractive option, and with a sticker price at about $US13,000, it is priced well below other electric vehicles.
The plant will start operations late in the fall, and will employ about 400 workers who will manufacture 10,000 cars annually. If demand picks up, the plant has the capacity to triple production. But will CT&T’s strategy work?
Like other foreign electric vehicle companies who seek to invest in the US and capitalize on growing consumer interest, tax credits, and grants, CT&T will start out by shipping parts and components from abroad. Heeding Americans’ desire to “buy American,” the company promises that it will switch to American parts as soon as possible, and that is where the devil is in the details. The cost of buying American parts and employing American labor (even in a non-union state like South Carolina) will prove challenging for CT&T and other manufacturers who are trying to balance cost-effective manufacturing, eco-friendly design, and creating American jobs using American components.
It’s all a gamble for CT&T, but South Korean firms over the past decade have shown that price and quality are not mutually exclusive, and Korea is fast becoming a green technology hub: buy an electric vehicle and chances are that lithium ion battery is Korean-made.
A generation ago, Hyundai introduced automobiles to the American public, and received not much more than laughs. Now Hyundai automobiles are respected and gaining market share in the United States.
Will CT&T and other Korean manufacturers lead the way in EV technology and manufacturing, revolutionizing Americans’ driving habits? It is a tall order in the land of the SUVs, but this is an encouraging start.