Under the new joint venture, this is anticipated to double by the end of 2011, which will produce up to 40,000 packs or around 1.04 gigawatt hours (GWh) of capacity. The new venture will be governed by executives appointed by EnerDel and Wanxiang, with both parties having “significant” equity.

Wanxiang’s electric vehicle division has planned production for its current customer backlog of 2,000 powertrain and battery pack systems in 2010, which involves cars, buses and commercial utility vehicles. Both companies expect the new joint venture will enable planned production volumes for 2010 to increase by as much as 50%.

EnerDel, which is simultaneously ramping production at its US and Korean facilities, says the deal should rapidly accelerate its business plan by opening up access to what it calls the most important electric vehicle market in the world.

Wanxiang is China’s largest auto parts supplier and second largest private company, with more than US$10 billion in annual revenue and 30,000 employees. Wanxiang is also the second largest stakeholder in Guangzhou Automobile, China’s most profitable domestic car company, which has joint venture partnerships that include Honda, Toyota and Fiat.

In addition to Guangzhou Automobile, current Wanxiang customers include SAIC, Chana, Haima and Yutong, the world’s second largest bus maker. Wanxiang’s electric vehicle division has been supplying the 2010 Shanghai World Expo, and will also supply the Asia Games, to be held in Guangzhou in 2010.

China is the fastest growing auto market in the world, currently producing 13 million vehicles per year and looking to sustain double digit growth over the next ten years. They are already ahead of the rest of the world in embracing EV technology, particularly in the heavy-duty sector. Over the next decade, we see demand for as many as one million heavy-duty vehicles. That’s a market opportunity worth tens of billions of dollars for the lithium-ion battery industry.

Working with such an established partner is an unparalleled opportunity to reach Wanxiang's customer base, and is the first of many partnerships EnerDel expects to create now it has crossed the rubicon of large-scale, commercial production.

—Charles Gassenheimer, Chairman and CEO of EnerDel parent company Ener1, Inc.

EnerDel announced in January that it has embarked upon a $237 million expansion project co-funded by the US Department of Energy, to meet anticipated demand for its advanced battery systems. This is part of an anticipated $600 million expansion project in the State of Indiana, which would yield capacity to produce around 120,000 electric vehicle battery packs a year, or 3.12 GWh. EnerDel expects this will generate up to 3,000 new jobs in the region.

Wanxiang has high quality precision manufacturing capabilities in place and ready to go, and extensive experience using a prismatic cell technology broadly similar to our own.

Another distinct advantage is Wanxiang’s excellent purchasing relationships with companies that supply precursor materials and manufacturing equipment to the lithium-ion battery market, which will allow EnerDel to significantly lower production costs across all of EnerDel’s manufacturing operations.

—Charles Gassenheimer

The Wanxiang-EnerDel collaboration will also involve EnerDel seed investor and strategic partner ITOCHU Corporation, a $130 billion Japanese trading house. ITOCHU will work alongside the joint venture, ramping its China-based material suppliers to provide quality materials for automotive grade production.

In addition to commercial relationships with THINK and Volvo, EnerDel battery packs are in test fleets with the Japan Postal Service, and demonstration projects with AC Transit and Mazda. EnerDel collaborates with Nissan on research and development, and the US Department of Defense for a prototype hybrid Humvee.