Mercedes-Benz parent company Daimler (DDAIF.PK) will be purchasing the 50.1 percent stake in its joint venture that’s owned by Evonik, giving complete control of Li-Tec JV to the German auto conglomerate. A price tag for the lithium-ion battery manufacturer was not revealed; Daimler will also be buying Evonik’s 10 percent share in their Deutsche Accumotive battery partnership.
Automotive News Europe reports that Evonik CEO Klaus Engel said in October that reduced demand for electric vehicles, paired with a fast-growing supply, has put pressure on prices. “A ‘three-digit-million’ euro sum and a lot of extra risk would be needed to keep up with the industry’s rapid development, prompting Germany-based Evonik to seek a buyer for its battery activities,” Automotive News quoted Engel as saying.
“The agreement creates important opportunities for Germany as an industrial location in an international environment of intense competition for realizing electric mobility as the drive system of the future. In this way, Evonik and Daimler have found a good solution,” Thomas Hermann, the head of corporate development at Evonik Industries, said in a statement.
Li-Tec produces the lithium battery cells used in the current model of Daimler’s Smart ForTwo electric minicar. It employs about 380 people.
Daimler also retains a 4 percent stake in Tesla Motors (NASDAQ:TSLA), and it will use the Fremont, California-based electric car company’s powertrain in its electric Mercedes B-Class compact. Daimler Chief Financial Officer Bodo Uebber also outlined plans last October to increase cooperation with Tesla.
“Along the value chain for drive-system batteries with lithium-ion technology, we now have the two most important components: the production of battery cells and the related development and production of highly complex drive-system batteries as a combination of cells and battery electronics. In this way, we secure not only expertise in electric mobility, but also the sites in Kamenz and Kirchheim/Teck,” said Harald Kröger, head of development at Mercedes-Benz Cars Electrics and Electronics, in Daimler’s statement.
Electric cars have been slow to catch on in Germany, though headway is being made. BMW’s i3 electric compact has logged more than 11,000 reservations in the region, and Smart’s electric ForTwo holds the market leader position in the country, with market share of 30 or so percent.