Daimler Seeks Buyer for Unsuccesful Lithium-Ion Battery Joint Venture Li-Tec Battery
For Daimler and Evonik, the sale of lithium-ion battery joint venture, Li-Tec Battery, seems to looming.
Both Daimler and Evonik seem to suggest that the unprofitable battery joint venture is somehow a failure, but that’s clearly not the case here.
It’s more like neither Daimler nor Evonik have the necessary funds to keep Li-Tec going. Nor do the companies seem to have the drive or time to turn Li-Tec into one of the major players.
When the joint venture was established, both Daimler and Evonik had hoped a third partner would come on board to share coasts and to possibly leverage Li-Tec’s offerings beyond the limited amount of Daimler electric vehicles. That partner never show up, so now a sell off seems to be in the works.
Daimler says Li-Tec could “fetch as much as €1 billion ($1.32 billion),” according the Wall Street Journal, so there’s clearly some value there.
Daimler had this to say on the matter:
“We are looking at different options to give Li-Tec a better long-term grounding in the very competitive global market for battery cells. We haven’t made a final decision.”
As the Wall Street Journal reports, “Daimler, which owns 49.9% of Li-Tec and Evonik, which holds the rest,” both seem to agree that a sell off is the way to go.
Industry sources say Li-Tec might slot in well with one of the leading Asian lithium-ion battery manufacturers, though some doubt Li-Tec’s ability to keep pace with the ever-advancing industry.
Li-Tec has struggled since opening back in 2008 and has yet to ever report a profit.
It’s our belief that Li-Tec is simply too small a player to compete in the segment and was actually doomed from the beginning. Analysts seem to agree with this statement by saying there’s no way Daimler and Evonik will get the $1.32 billion they’re shooting for.
Source: Wall Street Journal