Chinese automotive manufacturer Zhejiang Geely Holding Group, the parent company of Volvo Cars, has agreed to acquire the operations and assets of Terrafugia Inc., a U.S.-based firm developing flying cars.
No financial details were disclosed in an announcement released by Terrafugia yesterday. The company said the deal has received approval from all relevant regulators including the Committee on Foreign Investment in the United States (CFIUS). The acquisition came after U.S. lawmakers unveiled a new set of proposed laws designed to limit Chinese investment in U.S. companies, especially in critical high tech sectors such as artificial intelligence, robotics and aerospace.
Terrafugia was founded in 2006 by five Massachusetts Institute of Technology graduates. The company says its product, named Transition, is the world’s first practical flying car. The two-seat vehicle has a cruising range of 400 miles with top speed of up to 100 miles per hour in the sky. On the ground, the vehicle can drive at regular highway speeds. The firm is also developing a fully autonomous all-electric vehicle, TF-X, which has vertical take-off and landing capabilities.
Terrafugia said that it is aiming for mass production of Transition in 2019, and for the mass production of TF-X around 2023. Under the terms of the agreement, Terrafugia will remain domiciled and headquartered in the U.S., and continue to focus on its existing mission of developing flying cars.
“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," said Geely’s founder and chairman Li Shufu.
"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," Li adds.
A number of tech companies have stepped into the flying car sector. Last week, Uber’s head of product Jeff Holden said in a conference that the company is aiming to conduct test flight of its aerial taxi in the cities of Los Angeles, Dallas-Fort Worth and Dubai before 2020. Kitty Hawk, a start-up backed by Google’s co-founder Larry Page, debuted its prototype flying car this April.
Two months ago, Chinese Internet giant Tencent Holdings Ltd also led a US$90 million series B round in a German flying car start-up Lilium.