With the global introduction of the second-generation Nissan Leaf electric car due next week, one open question concerns the source of its battery cells.

To date, Automotive Electric Supply Corporation—a joint venture between Nissan and Japanese electronics giant NEC—has supplied lithium-ion cells for every Nissan Leaf built, a total now approaching 300,000 over more than six years.

Now, a Chinese private investment fund has agreed to purchase Nissan's stake in AESC, a deal first reported in late May by Bloomberg. Nissan will also buy NEC's shares of the joint venture and include them in the sale.

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GSR Capital, a Chinese private equity firm backed by the government of Hubei province, will take control of the unit for an undisclosed sum, earlier reported by Bloomberg to be roughly $1 billion.

The signing of the deal was reported in early August by Automotive Logistics and other outlets.

Chinese acquisitions of Japanese industrial entities are quite rare. But Chinese regulators are determined to boost sales of electric cars, so the appeal of such an acquisition would be obvious.

EDITOR'S NOTE: This story was originally published June 1, 2017, reflecting reports that Nissan was in the process of selling its stake in AESC. That sale was finalized in early August, with completion expected by December 2017, and we have updated the piece to reflect those details.

2011 Nissan Leaf - battery pack cutaway

2011 Nissan Leaf - battery pack cutaway

The deal includes not only AESC but its two battery plants, one in Sunderland, England, and the other in Smyrna, Tennessee, adjacent to Nissan's huge vehicle assembly plant.

Nissan drew down $1.45 billion of a $1.6 billion in low-interest loans granted by the U.S. Department of Energy to build that plant; it's not clear whether they have now been paid back in full, or whether GSR will assume the responsibility for the payments.

Meanwhile, Renault Nissan Alliance chairman Carlos Ghosn has said for a few years now that the alliance (which now includes Mitsubishi as well) wants the lowest-cost cells of suitable quality—and doesn't much care who makes them.

READ THIS: Ghosn: Nissan Not Tied To Own Batteries, Will Seek Other Suppliers (Oct 2014)

While every Nissan battery-electric vehicle has used AESC cells, its French partner Renault has used cells from LG Chem in certain of its lineup of electric models.

LG Chem is thought to have the lowest-cost cells, given that it's supplying GM for both the Chevrolet Bolt EV and the Chevy Volt plug-in hybrid.

It also has contracts with more than a dozen other automakers for plug-in vehicles.

Lithium-ion cell and battery pack assembly for Nissan Leaf electric car in Sunderland, U.K., plant

Lithium-ion cell and battery pack assembly for Nissan Leaf electric car in Sunderland, U.K., plant

Of the three major cell makers for electric cars—AESC, LG Chem, and Panasonic—AESC is viewed by some analysts as the weakest.

In the Leaf pack, which was only passively cooled, its first cell chemistry proved susceptible to extreme heat, including that found in Arizona parking lots during the height of summer.

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While AESC subsequently launched a "lizard cell" chemistry that is said to be far more heat-resistant, it was only fitted to Leafs from the 2015 model year and newer.

Meanwhile, Panasonic has worked closely with Tesla to optimize the designs of the cells it is fabricating at the company's Nevada gigafactory for the upcoming Model 3 that went into low-volume production in July.

[hat tip: Gary Wall]

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