Hybrid Kinetic Motors Inks $500m Deal With Italdesign Giugiaro

There’s a lot happening in the world of cars these days, but few stories are as compelling as the emergence of two rival US-based firms created by two former bosses of the Chinese automaker Brilliance. At face value, both Hybrid Kinetic Motors and Greentech Auto are little more than visa scams: neither attempts to hide the fact that their fundraising plans involve a US Visa program (EB-5) which allows citizenship to foreign nationals who invest a half-million bucks in an American business. For additional scam warning points, both firms purport to use mythical hybrid engines and plan factories with annual capacities of a million units. But as easy as it is to simply write these firms as Chinese visa hucksters grifting the good folks of such towns as Tunica, Mississippi and Bay Minette, Alabama, they keep showing up in the news with stories that predecessors like ZAP would have given their stock-price-boosting-press releases for. To wit: the latest news that Alabama hopeful Hybrid Kinetic Motors has signed a half-billion dollar deal with Italdesign-Giugiaro, the largest order in the famed design house’s 42-year history.

Automotive News [sub] reports that the deal involves the design and engineering of no fewer than eight Hybrid Kinetic models for the American market. HK CEO Benjamin Yeung reportedly chose Italdesign because he’d already worked with the firm; as CEO of Brilliance Leung had hired Ital to design the Zhonghua sedan, then the most modern Chinese-made car on the market. FEV Motorentechnick GmbH of Aachen, Germany may or may not be developing the hybrid kinetic drivetrain.

Further confusing the situation, Yeung (formerly known as Yang Rong) HK Motors and its parent company Far East Golden Resources Group have announced a $1.5b investment in magnesium-aluminum alloy drivetrain production capacity in Shenyang, China. Ironically, this marks Yeung’s return to Liaoning province, which he has sued for allegedly ousting him and taking over Brilliance (lawsuit in PDF format here). Weirder still, Alabama Live reports that an HK spokesman claims

HK Motors will allow the [Shenyang] development zone to manufacture 200,000 or more vehicles and keep the profits, according to the document… “This is critical for us to bring down unit cost given that we expect to spend over $1 billion to develop our engine, powertrain and hybrid system, and vehicle series,” [the spokesman] said.

The Chinese operation will supply engine castings and component modules for the Bay Minette plant, which would do “engine machining and powertrain and hybrid system assembly as well as vehicle assembly,” he said.

Yeung is reportedly working on raising $1.5b, as HK moves towards a reported 2013 production start at the $4.3b Bay Minette plant (which HK says will produce a million units per year by 2018). Baldwin County has provided $70,000 for site surveying for the new plant, and Alabama will likely donate a considerable sum to the project. Without proven demand for the kind of capacity HK is talking about, let alone proof of the technology the firm is talking about should give Alabama officials pause, to put it lightly. Paying half a billion bucks to a reputable European design house is a tempting signal, but not enough to overcome our fundamental suspicion of the whole convoluted, ambitious endeavor. We’ll be watching this story with considerable interest.