Nissan is selling its AESC (Automotive Energy Supply Corp.) battery manufacturing business that’s based out of Japan to Chinese firm, GSR Capital. It is believed that the deal will go through for USD 1 billion and is expected to be finalised in the next two weeks.
For those of you who didn’t know this, AESC supplied cells and modules for Nissan’s LEAF, e-NV200 and some of the Renault models too. Now most people may be surprised at a car maker selling out its battery business at the outset EV revolution, but let’s take a closer look. Nissan, over the years, is known to be edging further away from building all of its batteries, and has also been procuring cells according to their needs, from LG Chem. Nissan CEO Carlos Ghosn told reporters earlier that the reason behind using batteries from LG Chem instead of their own was because LG is simply the best battery maker out there.
On the other hand, analysts ascertain that GSR Capital is eager to move part of the battery manufacturing process to China since native car makers like Dongfeng Motor Group are looking to ramp up EV production, and it is definitely a winning proposition for the company. So what really changed the earlier perspective of ‘build your own batteries’? In 2015, LG Chem introduced and started taking orders for its $145/kWh battery cells in 2015, which just changed the earlier perception overnight. So it didn’t make battery production important for car makers (no investments needed) and they could now just focus on building the car itself.
