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Daimler, Evonik Ponder How to Prop Up Ailing Battery Cell Venture
Daimler AG may find a partner to help bolster its struggling battery cell venture with Germany's Evonik Industries AG unless the two companies decide to sell the venture, according to media reports.
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Daimler AG may find a partner to help bolster its struggling battery cell venture with Germany's Evonik Industries AG unless the two companies decide to sell the venture, according to media reports.
The Dresden-based venture, Li-Tec Battery GmbH, was set up five years ago to develop lithium-ion cells for Daimler's electric vehicles. The cells are assembled into batteries by a second Daimler-Evonik venture called Deutsche Accumotive GmbH.
Daimler owns 49.9% of the former company and 90% of the latter venture. The first result of the partnerships was the 17.6-kWh battery Daimler introduced last year in the electric version of its Smart ForTwo city car.
Li-Tec had hoped to achieve a breakthrough that could double or triple the power density of a lithium-ion cell by now. But that has not happened. Instead, the company's losses have grown steadily from its inception to €26 million (nearly $35 million) in 2011. The venture has warned that it expects to report operating losses through 2013.
The partners hope to garner €1 billion ($1.3 billion) by selling Li-Tech, though bankers tell The Wall Street Journal a lower price is more likely. But the two companies tell Bloomberg News they might opt to add a new strategic partner instead.
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