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Valuation of combined entity around $400 mln

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Aiways will focus on EV sales in Europe

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Aiways EVs will still be built in China

By Nick Carey

LONDON, May 15 (Reuters) - Chinese electric vehicle

maker Aiways will go public via a merger with U.S. special

purpose acquisition company Hudson Acquistion Corp in a

deal that should value the company around $400 million, the two

companies said.

The deal is a lifeline for Aiways, which halted production

at its Shangrao plant last summer as a fierce EV price war in

China squeezed automakers' margins. The company is among a group

of struggling Chinese EV startups including WM Motors and Human

Horizons that have suspended operations amid sluggish sales.

The SPAC merger should close by the end of the year, the

companies said.

Prior to its current financial struggles, Aiways had been

selling its U5 and U6 electric models in 16 European markets,

meaning it has existing products and operations where it is

ready to go, though scaling up production is expensive.

The plant in Shangrao has the capacity to build 300,000 EVs

annually.

Aiways had been in talks with investors for months on

restarting production of its existing models and developing a

new, affordable car as an export-only brand focused on Europe in

the short term.

"The new entity will be strategically positioned to

capitalize on our vision and resources in the European EV

market," Alexander Klose, managing director of Aiways Europe

said in a statement issued late on Tuesday evening.

Aiways will be headquartered in Europe to handle sales,

marketing, finance, while manufacturing, procurement and

research and development will mostly be handled in China,

according to a source familiar with the automaker's plans who

was not permitted to discuss them publicly.

The announcement comes just days after Chinese EV maker

Zeekr, a unit of, saw its shares rise almost

35% above their initial public offering price in a strong start

for the first major U.S. market debut by a China-based company

since 2021.

Founded in 2017, Aiways' investors include tech giant

Tencent ( TCTZF ), ride-hailing group DiDi and battery maker

CATL, which will remain shareholders, according to a source

familiar with the matter.

(Reporting By Nick Carey; Editing by Emelia Sithole-Matarise)