| | AUGUST 20198CIOReviewUTILIZING AN OPEN-PLATFORM BUSINESS MODEL TO CREATE NEW WORLD VALUEBy Dr. Lance Zhou, Chief Executive Officer of Karma AutomotiveAfter I joined Karma Automotive in 2017, we chose to embark upon an "open platform" business strategy, positioning ourselves as a high-tech automotive incubator. As part of our "Value Forward" business plan, Karma's mandate is to attract partners to accelerate our product development, create efficiency and enhance long-term brand value. While we continue to develop our own too, Karma's position in the luxury electric vehicle niche provides an excellent test bed for partners to incubate, grow and prove their emerging technologies. This in-turn allows luxury EV "start-ups" like Karma to move past the traditional OEM model of profits generated purely by sales and manufacturing to create long-term brand value through open-platform technology sharing. This has allowed the company to challenge the status quo and forge strong partner alliances with several innovators to create new profit centers and help speed product and technology development.Karma Profit CentersKarma's technologies, designers and craftsmen can help other companies speed their development process or customize their products. The depth of Karma's offering can extend beyond pure automotive due to various profit centers including a new power train test lab and Karma Innovation and Customization Center (KICC). In March 2019, Karma underlined its commitment to product development here in California by investing nearly $7.5 million in a new, state-of-the-art power train test lab which has been installed at Karma's Global Headquarters in Irvine, Cailf. The new equipment strengthens Karma's in-house engineering capabilities during a crucial moment of rapid product development. Another key profit center for Karma is the Karma Innovation and Customization Center (KICC) in Moreno Valley, Cailf., which will offer varying degrees of Karma vehicle customization ­ from color and materials through to a one-off car ­ and perhaps in the future, even on other brands' vehicles too. IN MYOPINION
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