Chinese companies slowly collecting discounted U.S. electric car assets

Ray Lane's Fisker Karma

Electric car startup Fisker Automotive is reportedly weighing investment and acquisition offers from Chinese auto tech companies. Bloomberg reports that there’s a $350 million offer for 85 percent of the company from Chinese state-owned car maker Dongfeng Motor Corp, and Reuters reports that China’s Zhejiang Geely Holding Group (which owns Volvo) has another offer for a majority stake with a deal between $200 million and $300 million.

If Fisker is able to close on either of these deals, it could move its business to China and gain the funds to start manufacturing its second car the Atlantic, as well as start paying back its loan to the Department of Energy. Fisker has been looking for suitors — partners and acquirers — for months, as it wrapped up a year with an incredible amount of problems.

Ray Lane's Fisker Karma

But $350 million for 85 percent stake is a major discount on the original valuation of Fisker. The company has raised a billion dollars in funding, and at one point back in 2011 had raised money at a reported valuation of $2.2 billion. But in 2012, the company struggled heavily and I had heard that it was looking to raise money last year at a significantly lower valuation. Clearly, when discussions are for majority stake deals for between $200 million and $300 million, there’s been massive discounting.

Fisker isn’t the only energy tech company that’s looking to sell for a discount to Chinese conglomerates. Lithium ion battery maker — which sold batteries for Fisker’s electric car — went bankrupt and its assets are being sold off to Chinese auto tech giant Wanxiang for $256.6 million. A123 Systems held the largest IPO in 2009, raising some $371 million, and went public at $20 per share. A123 also raised more than $350 million from private investors when it was still a startup.

Ray Lane's Fisker Karma

Wanxiang has also invested in struggling electric car company Smith Electric Vehicles. Battery maker Boston Power also turned to Chinese investors to take its electric car battery business to the next level, as did Protean Electric. Electric car company Coda Automotive — which is also struggling — has a joint venture with China battery maker Lishen and a deal with auto maker Great Wall Motors Company.

Chinese companies and the Chinese government are very interested in amassing next-gen technology for electric cars. China is projected to be the largest electric car maker and market in the world, and is already the world’s largest auto market.

It’s not just electric car assets that Chinese companies want. Wanxiang invested $420 million into GreatPoint Energy, a company based in Cambridge, Mass. that converts coal into cleaner-burning natural gas. And Chinese power company Hanergy acquired the assets of Miasole for $30 million (Miasole had raised hundreds of millions of dollars from private investors).

You're subscribed! If you like, you can update your settings


Comments have been disabled for this post