Nissan calls off potential $1b sale of battery unit to China’s GSR

Nissan Motor cancelled a potential $1 billion sale of its electric car battery unit to China’s GSR Capital, and while the automaker said it still aims to find a buyer, analysts feel it could be a hard sell as the technology is not cutting edge.

Japan’s second-biggest automaker said on Monday the Chinese investment firm lacked the funds to make the purchase. The deal could not be closed by the June 29 deadline, Nissan said, ending a process that had faced several delays.

GSR, which earlier this year committed to spending hundreds of millions of dollars in electric car battery ventures in places such as Sweden and Turkey, declined to comment.

As tightening global emissions regulations send global automakers scrambling to develop and mass produce electric cars, battery companies and auto parts makers are seeking to expand production of lithium ion batteries, a key component of these vehicles. Investors have been buying into the battery industry.

In August, Nissan announced its plan to sell Automotive Energy Supply Corp (AESC), which includes battery plants in the US, England and Japan, to GSR. A source told Reuters that the Chinese firm had agreed to pay Nissan a total of $1 billion for the deal.

The Japanese automaker has been wanting to sell AESC as it looks beyond its unit to procure low-cost, high-performing lithium batteries. Its automaking partner Renault SA sources EV batteries from South Korea’s LG Chem.

But the deal with the Chinese company faced a series of delays, including prolonged talks between GSR Capital and NEC Corp, which holds a 42 percent stake in the company, over the acquisition of its subsidiary NEC Energy Devices, which holds a 7 percent stake.

Nissan, which holds a 51 percent stake in AESC, had extended the transaction deadline three times from its original December 2017 closing date.

A spokesman of the automaker said the company still intends to sell the subsidiary, but declined to comment on whether GSR could still be a prospective buyer.

Some analysts said that finding other investor-buyers for AESC could be difficult given that its lithium manganese oxide-based battery technology, while stable and low cost, delivers lower performance than some other technologies.