Zhejiang Geely Holding Group completes acquisition of Terrafugia, Inc.

  • Terrafugia Inc to become fully owned subsidiary of Zhejiang Geely Holding Group
  • Geely Holding committed to investing in Terrafugia to make flying car a reality
  • US-based engineering team already expanded considerably in anticipation of takeover

November 13th  2017, Hangzhou and Boston: Zhejiang Geely Holding Group (‘Geely Holding’) is pleased to announce it has entered into an agreement with Terrafugia Inc, a US-based company focused on the innovation, engineering and production of flying cars and future technologies, to acquire its operations and assets in their entirety.

Terrafugia was founded in 2006 by five award-winning graduates of the Massachusetts Institute of Technology. Since its inception, the company has made considerable progress towards realizing its vision of bringing a new form of mobility to the world, and delivered a number of working prototypes. Terrafugia aims to deliver its first flying car to the market in 2019, with the world’s first VTOL (vertical take-off and landing) flying car being made available by 2023.

Under the terms of the agreement, Terrafugia will remain domiciled and headquartered in the United States of America, and continue to focus on its existing mission of developing flying cars. Terrafugia will also benefit from the Group’s significant expertise and track record of innovation within the global auto industry.

This deal has received approval from all relevant regulators including the Committee on Foreign Investment in the United States (CIFIUS).

 

Company Structure

As Terrafugia embarks upon this new phase of its development, Terrafugia is pleased to announce its new Board of Directors, the new Terrafugia Board of Directors will be compromised of seven individuals.

Mr. Nathan Yu Ning, Geely Holding Vice President of International Business and Executive Advisor to the Board will become the Chairman of Terrafugia with three other appointees from the Geely Holding Company including Geely Holding Vice Chairman Mr. Yang Jian and Frank Li Yifan, Geely Holding Vice President of Strategic Investment and New Business, Mr. Ian Zhang, Geely Holding Deputy CFO and Director of Auditing.

Chris Jaran – former Managing Director for Bell Helicopter China – has been announced as a board member and Chief Executive Officer effective immediately. Terrafugia founder Carl Dietrich will serve on the board of Directors and transition to the newly created role of Chief Technology Officer (CTO) and continue to work on the market actualization of flying car technology.

Mr. Koen Bouwers, a seasoned executive, will continue to serve on the Terrafugia board as he has since 2008.

In anticipation of this transaction, Terrafugia’s team of engineers in the USA has already been tripled over the past quarter with Geelys Holding’s support. Geely Holding are fully committed to further investment in the business, including the creation of more high tech jobs in the USA, following the completion of the acquisition.

 

Zhejiang Geely Holding Group Founder and Chairman Li Shufu said:

“The team at Terrafugia have been at the forefront of believing in and realizing the vision for a flying car and creating the ultimate mobility solution. This is a tremendously exciting sector and we believe that Terrafugia is ideally positioned to change mobility as we currently understand it and herald the development of a new industry in doing so. Our investment in the company reflects our shared belief in their vision and we are committed to extending our full support to Terrafugia, leveraging the synergies provided by our international operations and track record of innovation, to make the flying car a reality.”

 

Terrafugia’s newly appointed CEO, Chris Jaran, said:

“After working in the helicopter industry for over 30 years, and the aviation industry in China for 17 years, Terrafugia presents a unique opportunity to be at the forefront of a fledgling but enormously exciting industry. The support that Geely has pledged to make Terrafugia’s vision of a flying car a commercial reality is unprecedented, and I assume this role with full of confidence for the future, with our first priority being the expansion of the company’s R&D capabilities.”

 

Terrafugia founder and CTO Carl Dietrich said:

“We started Terrafugia with a vision to change the future of transportation with practical flying cars that enable a new dimension of personal freedom. Now as part of Geely Holding Group I am confident that we can reach that vision and subsequent commercial success by utilising the Groups shared global synergy.”

 

About Zhejiang Geely Holding Group

Zhejiang Geely Holding Group (Geely Holding) is a global automotive group that owns several well-known international automotive brands, with operations spanning the automotive value chain, from research, development and design to production, sales and servicing.

Founded in 1986 by Li Shufu, the company’s Chairman, in the city of Taizhou in China’s Zhejiang province, Geely Holding launched its automotive business in 1997 and is now headquartered in Hangzhou, China. The Group comprises three businesses: Geely Automobile Group, Volvo Car Group and Geely Commercial Vehicles Company. Its brands include Geely Auto, LYNK & CO, Volvo Car, Polestar, the London Taxi Company and Yuan Cheng Auto.

Geely Holding sold a combined 1.3 million vehicles in 2016, with Volvo Car sales reaching historic highs of 534,332 cars globally and Geely Auto Group sales growing over 50% to reach 765,851 units in total, exceeding the group’s targets. In the first half of 2017, Geely Auto Group sold a combined 530,627 units, an increase of 89% over the same period in 2016 and completing 53% of the groups 2017 sales goal of one million units. The success has prompted senior management to revise the year end goal to 1.1 million units. Volvo is also on course for another record breaking year with sales in the first 6 months of 2017 reaching 277,641 units, an increase of 8.2% over the same period last year.

ZGH has over 70,000 employees across the world, and has been listed in the Fortune 500 for the past five years. For more information regarding Zhejiang Geely Holdings please refer to the official website at www.geelyholding.com

 

About Terrafugia:

Five award-winning MIT graduates founded Terrafugia in 2006. Today, Terrafugia’s team of experienced engineers, designers, certification experts, and business professionals combines aviation and automotive expertise in pursuit of our common vision for the future of personal transportation.

Terrafugia’s ‘The Transition®’ is the world’s first practical flying car. It offers the convenience of driving and the speed of flight, and will incorporate autonomous technologies that will make the Transition® safer than any other small aircraft in the sky. Terrafugia has already developed and flown two full-scale prototypes, and has received all of the special legal approvals necessary to bring the Transition® to market in the US

Terrafugia’s vision for the future is the TF-X™: a mass-market flying car with the potential to revolutionize the way we all get around. An all-electric vehicle with vertical takeoff and landing (VTOL) capabilities and computer-controlled flight, the TF-X™ is the flying car of the future. Terrafugia’s product development roadmap lays the groundwork for achieving this vision through a series of realistic steps over the coming decades.

 

Media FAQ

  1. How much is this deal worth?

We will not announce specifics at this stage. Geely is honoring Terrafugia’s commitment to its original shareholders agreements, and that is to bring flying car technology to the market.

  1. What is the plan for Terrafugia after the takeover?

Geely is committed to making the flying car dream a reality; the Group plans to make Geely’s full global synergies available to Terrafugia. As an initiate and immediate step, we will be expanding the company’s R&D capabilities in the USA as well as in China.

  1. Will this result in American jobs being lost to China?

Not at all. In fact, in anticipation of the deal and the increased investment Geely’s ownership will bring, Terrafugia has already tripled the number of its US-based engineers from 30 staff to close to 100. Moving forward, Geely is committed to further investing in Terrafugia, which will lead to more high tech jobs in the United States

  1. When will you deliver the first flying car?

We are aiming for 2019 for the first flying car with VTOL (Vertical Take-off and landing) flying vehicles being debuted in around 2023.

  1. Is this the first time that Geely has invested in the USA?

Geely Holdings has a track record of investment in the USA via its subsidiary company Volvo Cars, which invested over 1 billion USD from 2015 to 2017 towards a new full car producing facility in South Carolina. This facility is expected to produce 100,000 cars per year and employ nearly four thousand workers in the region.  Learn more here: http://www.volvocars.com/us/about/our-company/south-carolina-factory

  1. When will Geely Auto vehicles enter the North American/US Market

We do have plans to enter the US market with the LYNK & CO brand from 2018-2019 onwards.

  1. Will Terrafugia vehicles will be produced in the USA?

We are fully committed to investing in the USA with production and engineering facilities to satisfy market demand.

 

For further questions please contact:

Media Contact

China:

Ash Sutcliffe

Zhejiang Geely Holding Group

ash@geely.com

North America

Arif Shah

Brunswick Group

ashah@brunswickgroup.com