Saab Automobile AB’s successor gets some good news after the deal between its partnering company, GSR, and Nissan fell threw. The $1 billion deal was originally set to be completed in December of 2017, and would have led to the building of a battery manufacturing facility in Trollhättan.
While Nissan has called off the sale of its Automotive Energy Supply Corp (AESC) subsidiary to GSR, it has not stated whether or not it still considers GSR as a potential buyer. According to Reuters, other companies that were reportedly interested in buying AESC – before the deal with GSR was announced – include Japan’s Panasonic Corp, LG Chem, Samsung SDI, and China’s CATL (Contemporary Amperex Technology Ltd). It’s worth noting that Panasonic is a supplier for Tesla’s electric car batteries, and that Renault, Nissan’s auto-manufacturing partner, gets its batteries from LG Chem.
To GSR’s benefit (and therefore NEVS’), there seems to be a lack of dire interest in AESC from other companies. For instance, Panasonic has since rescinded its interest in AESC. The head of Panasonic’s automotive business, Yoshio Ito, told reporters, “At the moment we’re not interested in acquiring an existing battery maker.”
The reason for this pull-back stems from analysts who claim that while AESC’s lithium manganese oxide-based battery technology have a lower cost, they also deliver lower performance than other available technologies.
AESC hasn’t been able to increase the performance of its batteries to the level it was hoping for… Unless you have a technology which stands out, it could get more difficult to find an investor in an operation like this. – Yasuo Imanaka, chief analyst at Rakuten Securities (Reuters).
While the future of AESC and GSR’s potential ownership remain in limbo, NEVS has recently received some news that should offer some relief. The electric car manufacturer has just won a legal battle with Beijing Zhigan Shenghou Technology, granting it $108 million USD.
We have removed Zhigan from the equation and have now received soothing information from GSR. They have made deposits a number of times during the spring and summer. We have good relations and it is a part of the plans to make GSR a major partner of Nevs – Fredrik Fryklund, NEVS Communications Manager.
NEVS also seems to be ahead of the game when it comes to locking in deals with other suppliers. BMW just signed a deal with CATL for $1.6 billion in June and a few days ago FT.com reported that BMW upped the ante to $4.7 billion, which gave it the right to take an equity stake in CATL. Dailmer, Honda, and Byton secured their deals with CATL in the first quarter of 2018, while NEVS settled its deal in the first quarter of 2017.
Stock market investors should note that CATL’s share prices have grown to ¥176.3 billion – or about $1.58 billion USD – doubling its value a month after being listed on the Shenzhen Stock Exchange.
It’ll be interesting to see what happens with AESC, and how it affects the market. The Chinese electric vehicle market is currently the largest in the world, and CATL takes up 30 percent of it. Should CATL acquire AESC, it would make NEVS much more dependent on CATL as a supplier.