(Yicai Global) Feb. 4 -- Shares of Zotye Automobile slumped after Ford Motor said that the US carmaker has terminated its joint venture agreements with the struggling Chinese vehicle manufacturer.

Zotye's stock price [SHE: 000980] slid 4.9 percent to CNY1.94 (30 US dollar cents) this morning. The shares once reached as high as CNY18.16 (USD2.80) in 2016.

Ford will integrate its network and resources in China and build more business centers to launch pure electric vehicles and plug-in hybrids in the country, the Michigan-headquartered firm's Chinese arm told Yicai Global yesterday.

The US partner called off the cooperation plan due to major changes in China’s pure electric vehicle industry and the related policies in recent years, an insider at the company told Yicai Global.

The pair agreed to form a JV in August 2017 to produce 100,000 electric vehicles a year, with each taking a 50 percent stake. Production was supposed to start in September 2019.

But soon after signing, the Chinese company, whose cars had made up 15 percent of all electric vehicles sold in China in 2016, suffered a sales slump. Wages were in arrears and funding was hard to come by, reports said at the time. Considering the JV, the trail went cold. Finally, the Covid-19 pandemic dealt a devastating blow to the firm known for its Nomad sport-utility vehicles.

Zotye is drowning in debt. Its parent firm, Tech New Group, filed for restructuring bankruptcy of the Zhejiang province-based company on Sept. 2, 2020, indicating that it might hand over its controlling stake in the carmaker as part of the restructuring process.

The US auto company is not giving up on the market. Ford is planning to launch its Mustang Mach-E, the company's first all-electric SUV, in China this year, according to its earlier announcement.

Editor: Emmi Laine