Daimler and Evonik are reviewing options for Li-Tec JV

Article by Anita Panait, on June 12, 2013

Daimler is reviewing options for its battery-cell joint venture with Evonik Industries. Daimler and Evonik created the Li-Tec venture in 2008 to provide future Daimler electric vehicles with batteries, with an aim to give the German carmaker an advantage in electric vehicles over BMW. Daimler spokeswoman Silke Walters disclosed that the carmaker wants to provide Li-Tec with "a broader footing" in the "challenging" battery-cell market.”

Evonik spokeswoman Barbara Mueller remarked that the review may result to "bringing a new strategic partner on board." Citing unidentified sources, the German online edition of the Wall Street Journal reported that Daimler and Evonik were considering selling the joint venture for around EUR1 billion ($1.3 billion).

Li-Tec’s sale would mean that Daimler is abandoning its bid to control all technologies along the value chain of electric vehicles, including cell technology and the electric engine. A sale would also highlight the fact that demand of electric vehicles were slower than forecasted.

According to Daimler’s 2012 annual report, the joint venture posted EUR26 million in losses in 2011. In 2012, Daimler launched an electric version of its Smart two-seater microcar and will introduce the B-class Electric Drive in 2014. Evonik recently reported that its profit for the first quarter of 2013 dropped 10 percent as the chemical company trimmed prices for some of its products while costs of raw-material costs surged. [source: automotive news - sub. required]

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