United States-based Ener1 Inc. and Wanxiang Electric Vehicle Company Limited, a division of Chinese conglomerate Wanxiang Group Corporation, agreed to jointly manufacture lithium-ion cells and battery packs to address the growing demand in the Chinese market.
The companies will form a joint venture, Zhejiang Wanxiang Ener1 Power System Company Limited, to produce lithium-ion battery systems for Wanxiang’s existing light- and heavy-duty automotive and power grid customers for delivery this year.
The joint venture will use Wanxiang’s existing 553,000 square foot facility in Hangzhou, Zhejiang province. It will have an annual cell manufacturing capacity of 300 million ampere-hours – the equivalent of 40,000 electric vehicle battery packs – by 2014.
Wanxiang Electric will hold a 60 percent stake in the new company and will provide property, plant, equipment and customer relationships, such as State Grid, SAIC Motor, Dongfeng Motor, Guangzhou Auto and Yutong.
Ener1 will own the remaining 40 percent and will contribute intellectual property, engineering, manufacturing and technical expertise. The company expects this new venture will expand its global footprint and increase its workforce through the addition of research and development and engineering staff in the United States.
“Wanxiang and Ener1 share a vision to help fulfil 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.
By 2012, the Chinese government aims to achieve an annual production of 500,000 hybrid or all-electric cars and buses, which is expected to address the anticipated environmental impacts and rise in oil demand brought by potentially hundreds of millions of new vehicle purchases by the expanding middle class.
China spent 1.81 billion Chinese yuan ($273.6 million) in subsidies from June to November last year to boost green vehicles use, according to its Ministry of Industry and Information Technology.
In October, Reuters reported China’s output of electric vehicles will hit 1 million units by 2020, citing a report from the country’s official Xinhua news agency.
