Nissan to sell electric-car battery unit AESC to Chinese company: report

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2017 Nissan Leaf

2017 Nissan Leaf

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With the second-generation Nissan Leaf electric car due to break cover sometime in the next few months, 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 firm is reportedly negotiating to take a sizable stake in AESC, though the deal hasn't yet been finalized.

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That news comes via a report in Bloomberg last week saying that GSR Capital, a Chinese private equity firm that is backed by the government of Hubei province, could take control of the unit for roughly $1 billion.

The report notes that the deal isn't final yet, and that Chinese acquisitions of Japanese industrial entities are quite rare.

But with Chinese regulators determined to boost sales of electric cars, and those cars and their components largely having to be built in China, the appeal of such an acquisition would be obvious.

2011 Nissan Leaf - battery pack cutaway

2011 Nissan Leaf - battery pack cutaway

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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.

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.

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

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

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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, they 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, that has only been 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, scheduled to go into production before the end of this year.

[hat tip: Gary Wall]

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