Ener1 and Wanxiang to sell batteries in China
2011-01-24 09:04:19 【Print】
Shares of lithium-ion battery maker Ener1 Inc. soared Tuesday after the company announced it is teaming up with Wanxiang Electric Vehicle Group Ltd. to manufacture batteries for the Chinese market.
The New York-based company's stock rose 96 cents, or 26 percent, to $4.64 in afternoon trading, earlier rising to a 52-week high of $5.90. The deal comes as a Chinese trade mission signs $600 million in deals with U.S. companies ahead of President Hu Jintao's visit to Washington this week.
The companies will manufacture Li-on cells and battery packs for electric vehicles — about 40,000 annually by 2014, if the companies ramp up manufacturing according to schedule. Under the agreement, Wanxiang will hold a 60 percent stake in the venture.
Wanxiang, a division of the Chinese conglomerate Wanxiang Group Corp., will offer its 553,000 square-foot factory in its home city of Hangzhou, China for the use of manufacturing the batteries. It will also take advantage of existing relationships it has with customers such as State Grid, SAIC Motor, Dongfeng Motor, Guangzhou Auto and Yutong.
Ener1, in turn, will provide intellectual property and engineering, manufacturing and technical expertise. The venture will expand the company's global presence and also compel it to create jobs in its research and development and engineering divisions.
"This joint venture gives us scalability by leveraging an existing manufacturing facility and an established broad customer base," said Charles Gassenheimer, Ener1's chairman and chief executive officer. "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."
The agreement comes after the Chinese government set an annual production goal of 500,000 hybrid or all-electric vehicles by 2012.
