What happened: In a deal expected to be announced at Tuesday’s Shanghai auto show, Toyota has licensed the design of its eQ electric microcar to Chinese electric vehicle startup Singulato in exchange for first rights to purchase the firm’s future green-car credits generated as part of China’s new EV quota system. While a Singulato source said acquiring the license cost “several tens of millions of dollars,” official figures are not expected to be released. The company is set to unveil a new concept car based on Toyota’s eQ at the Shanghai auto show.
Why it’s important: According to Singulato CEO Shen Haiyin, the deal proves that his company has what it takes to compete at the highest levels of the industry. Founded in 2014, the startup will debut its first in-house developed electric car amid reports that the Chinese EV market is a bubble close to bursting. The number of EV manufacturers has tripled to 486 in the last two years, and while electric car sales are projected to reach 1.6 million units in 2019, they are unlikely to match the collective manufacturing capacity of the industry’s competing startups.