Jiuzi Holdings, Inc. Expands Sales Footprint For New Energy Vehicles in China

July 13, 2022 8:00 AM EDT | Source: Jiuzi Holdings, Inc.

Hangzhou City, Zhejiang Province--(Newsfile Corp. - July 13, 2022) - Jiuzi Holdings (NASDAQ: JZXN) has just announced its latest expansion and revenue growth plans for NEV's (New Energy Vehicles) in China.

While many emerging publicly traded companies have yet to mass produce and sell electric vehicles, Jiuzi's system is hooked to China's best-selling Electric Vehicle brands and that has allowed their franchise model to grow quickly during the past 3 years.

Mr. Shuibo Zhang, CEO of Jiuzi Holdings, Inc., which operates franchises and retail stores selling New Energy Vehicles (NEVs) throughout China, is excited to share a recent interview:

Q: Explain why the sudden global need for electric vehicles? What factors are leading to the high demand?

Zhang: From a global perspective, the new energy vehicle industry is generally at an early stage of growth. With the promotion of policies and quality supply, the demand for new energy vehicles will continue to show high growth, driving the development of the upstream industry. New energy vehicles are in the "golden age" of rapid development, and the three major markets of China, Europe and the United States may lead the global demand for new energy vehicles to continue to grow at a high rate.

The bloom of the NEV industry depends on the following factors:

  • Oil reserves are limited, and it is a non-renewable energy

  • The pollution of traditional vehicle and the carbon emissions request

  • The rapid growth of NEV industry produce benefit to economy and contribute employment

  • The supporting policy from government and subsidy

Q: Why is China outpacing the North when it comes to electric car sales? What is the expectation for 2028?

Zhang: The population advantage of China leads to a huge market base. China has been promoting the use of NEVs since 2015, hence, the infrastructure of NEV (such as charge stations, battery research etc) were constructed ahead of most of the world. The Chinese government is highly concerned about climate change. Therefore, the Chinese government attaches great importance to the development of NEVs and has set a clear development course for the industry.

The R&D for NEV in China had some break-through in the past 5 years as the number of new energy vehicles in China has increased by more than 9 times in the past 5 years. Since China sticks to the pure electric drive strategy, the number of battery electric vehicles reached 3.1 million in 2019, accounting for 81.4% of all new energy vehicles. Currently, thanks to technology and industrial transformation, new energy vehicles have become the backbone of the transformation and upgrade of the automobile industry.

We cannot project the market data in far future 2028, but according to national development plan, the sales of new energy vehicles in China will exceed 5 million in 2025.

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Sales Volume of China's New Energy Vehicle Market from 2018 to 2025

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Q: Why is the market for new electric vehicles now one of the fastest-growing industries?

Zhang: We believe it is driven by several factors. They include:

  • Energy security:72.9% of oil consumed in China are imported

  • Environment protection: low carbon emission, low global warming, and sustainable development。

  • Promotion and policy

  • Technology revolution: the research and development of new energy transform to economic benefit rapidly

  • In NEV industry, every country competes equally

Q: How does Jiuzi differ from traditional car dealers? What is your major differentiator?

Zhang: We franchise and operate retail stores under the brand name "Jiuzi" to sell New Energy Vehicles ("NEVs") in 3rd-4th tier cities in China. We are the only retail platform in selling multi-brand NEVs and have scale effect in supply chain

Our model allows franchisees to be their own employers and maintain control over all employment-related matters and marketing/pricing decisions, while also benefiting from the Jiuzi's brand, resources, and operating system.

Q: How do the dealers make money? What is the model?

Zhang: Our franchisees make money, instead of car dealers, who benefit by earning commission via the purchase of lower price NEVS under the brand name of JUZI and make higher profits as the cost of inventory and store management are lower than traditional stores. We offer an equity incentive plan and offer car financing and after-sale service fee to franchisees. We will import third-party institutions such as bank, insurance companies. The platform provides Intermediary services to final customers instead of running financing directly as it is illegal to provide financial services without a license.

Q: Explain why battery charge distance is so important and how you've addressed it?

Zhang: The reliability of battery is the key of NEVs, the higher energy per liter of battery volume the more effective of energy use. Customers feel anxious about the charge distance of the battery, because of the uncertainty of stability and the shortage of plug-in charge stations. The infrastructure of charge stations in China has been improved recently, reaching 7.5 stations per 100 kilometers.

Q: Why is community so important? How do you engage car customers for life?

Zhang: Our new app is an effective way to acquire final customers. During the lifetime of a NEV is also a cycle for communication with customers and through our community to promote repurchase. We provide a car supermarket online with off-line test drives, and we also bind car financing or insurance on the platform with other services such as repairing and maintenance. The existing customers also can introduce new customers to our on-line platform to be our potential buyer.

Q: Explain why targeting smaller cities makes business sense?

Zhang: The 3rd, 4th and 5th tier cities have a lower degree of competition than the mega cities. The market in these cities has a large volume and a cost saving effect. Customers in smaller targeted cities are more sensitive to the price of NEVs and are more willing to buy NEVS than traditional cars.

Q: Can your model be duplicated around Asia or North/Latin America in the future?

Zhang: China's new energy vehicle industry is still in the early stage of development and has great potential. The General Office of the State Council issued the "New Energy Vehicles Industry Development Plan" on November 2, 2020 and put forward the development target that the sales of new energy vehicles would reach about 20% of the total sales of new vehicles by 2025. It is expected that new policies will be introduced continuously to promote the rapid development of the new energy vehicle industry. There will be a new purchase cycle in the next few years. Many vehicles of National Ⅲ and Ⅳ emission standards will be replaced. Some cities with restricted purchases of new energy vehicles may have greater development room in the cities that have curbs on vehicle purchase. For the market overseas, our company will put it in a future vision, but in recent years, we will still focus on mainland China.

For more information, investors are invited to visit the Company's website at http://www.zjjzxny.cn.

Contact:

Jiuzi Holdings Inc.
Han Zhang
zhanghan@jzxny.club

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/128479

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