Geely is the parent company of Swedish luxury brand Volvo Cars, along with the London Taxi Company.
Today, Zhejiang Geely Holding Group, owner of Volvo Car, announced that it has reached an agreement with Terrafugia Inc.to acquire the activities and assets of the U.S. company.
Terrafugia, despite being founded by a quintet of MIT graduates, is hardly immune to such skepticism.
Geely said it aims to deliver its first flying auto to the market by 2019, and then launch the world's first vertical take-off and landing aircraft, or VTOL, by 2023.
Terrafugia has several working prototypes and Geely Holding said it insisted the company's innovation, engineering and production were worth joining onto.
The price tag of the acquisition has not been disclosed, but Geely will acquire all outstanding shares and appoint three board members including Nathan Yu Ning, its vice president of global business. Committee on Foreign Investment in the United States (Cfius) has already approved the deal. The company is also the latest in a line of Geely's acquisitions outside its native China, including Volvo seven years ago as well as a more recent purchase of a 49.9% equity stake in Malaysian automaker Proton, and a 51% stake in British sports vehicle maker Lotus. The question surrounding Terrafugia, then, appears centered on what business case can be made for self-flying cars.
He added, "This is a tremendously exciting sector and we believe that Terrafugia is ideally positioned to change mobility as we now understand it and herald the development of a new industry in doing so".
"Our investment in the company reflects our shared belief in their vision to make the flying vehicle a reality", said Li Shufu, Geely's founder and chairman. He will also serve as one of the board of directors.
"Although it will take some years for makers of flying cars to achieve commercial success, it makes good sense for Geely to first go in and acquire the know-how as part of its long-term agenda", said Yale Zhang, managing director of consultancy Automotive Foresight.