Jan 19 2011
Ener1, Inc. (Nasdaq: HEV), a leader in lithium-ion battery technology, and Wanxiang Electric Vehicle Co., Ltd., a division of the Chinese conglomerate Wanxiang Group Corporation, today signed a joint venture agreement to co-manufacture Li-ion cells and battery packs for the rapidly growing Chinese market.
The new company will harness cutting-edge American technology and advanced Chinese manufacturing capability to produce battery systems for Wanxiang's several existing light- and heavy-duty automotive and power grid customers for delivery this year.
"Wanxiang and Ener1 share a vision to help fulfill our country's strong commitment to electrifying transportation on a mass scale and to deploy lithium-ion technology to improve the effectiveness of the power grid," said Lu Guanqiu, founder and chairman of Wanxiang Group. "We believe our manufacturing expertise and deep customer relationships throughout China and in the region will help ensure the success of this timely technology venture."
The signing takes place against the background of a state visit by Chinese President Hu Jintao and expanding U.S.-China bilateral initiatives to spur cooperation in transportation electrification and grid energy storage, a hallmark of the Obama administration's policy toward China. 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.
The new venture – Zhejiang Wanxiang Ener1 Power System Co., Ltd – will use Wanxiang Electric Vehicle's existing 553,000-square-foot facility in Hangzhou. The joint enterprise is expected to achieve annual cell manufacturing capacity of 300 million Ampere hours (approximately 40,000 electric vehicle battery packs) annually by 2014.
"We are honored and excited to enter into this important new venture with one of China's most respected industrial leaders," commented Ener1 Chairman and CEO Charles Gassenheimer, referring to Wanxiang's emergence from a small business to the second-largest private company in China and the country's largest tier-one auto parts supplier with $10 billion in annual revenue. "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."
Wanxiang Electric Vehicle will have a 60-percent 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-percent 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 U.S.
"We are very fortunate to be able to work in partnership with a manufacturing giant in one of the fastest-growing markets in the world for Li-ion technology," Gassenheimer commented. "A combination of industrial policy, explosive growth potential and vision make this a winning proposition for both sides."