Ener1 and Wanxiang sign strategic JV agreement to co-manufacture Li-ion cells and packs for China market; targeting 300M Ah capacity by 2014
US-based Li-ion battery manufacturer Ener1, Inc. and Wanxiang Electric Vehicle Co., Ltd., a division of the Chinese conglomerate Wanxiang Group Corporation, signed a joint venture agreement to co-manufacture Li-ion cells and battery packs for the rapidly growing Chinese market.
The new venture—Zhejiang Wanxiang Ener1 Power System Co., Ltd—will use Wanxiang Electric Vehicle's existing 553,000-square-foot facility in Hangzhou and produce battery systems for Wanxiang’s several existing light- and heavy-duty automotive and power grid customers for delivery this year. The joint enterprise is expected to achieve annual cell manufacturing capacity of 300 million Ah (approximately 40,000 electric vehicle battery packs) annually by 2014.
The signing took place against the background of a state visit by Chinese President Hu Jintao to the US and expanding US-China bilateral initiatives to spur cooperation in transportation electrification and grid energy storage.
The Chinese government, anticipating the environmental and oil demand impact of potentially hundreds of millions of new vehicle purchases by a burgeoning middle class, has set an annual production goal of 500,000 hybrid or all-electric cars and buses by 2012.
This joint venture gives us scalability by leveraging an existing manufacturing facility and an established broad customer base. Applying our advanced battery technology will enable us to hit the ground running in serving what is potentially the largest advanced battery market in the world.—Ener1 Chairman and CEO Charles Gassenheimer
Wanxiang Electric Vehicle will have a 60% equity stake in the joint venture. The company will contribute property, plant, equipment, and customer relationships, including State Grid, SAIC Motor, Dongfeng Motor, Guangzhou Auto and Yutong.
As part of its 40% stake, Ener1 will provide intellectual property, engineering, manufacturing and technical expertise. The joint venture will help further expand Ener1’s global footprint, and increase the company’s head count through the addition of R&:D and engineering staff in the US.
Wanxiang Group is China’ largest automotive components manufacturer, and a conglomerate with more than US$10 billion in revenue covering businesses including financial services, alternative energies, agricultural products, international trading, natural resources, real estate, private equity and venture capital investment, and other areas.
The Boston Consulting Group has listed Wanxiang Group as one of the 100 most challenging and successful companies in China.