Li-Tec JV uncertain as part-owner Daimler seeks savings

Article by Eugene Conan, on March 1, 2014

Daimler is looking for savings at its Li-Tec battery cooperation with Evonik Industries, causing uncertainty about the future of the joint venture, disclosed Evonik supervisory board member Michael Vassiliadis. "Evonik is unsettled because Daimler's not sure how it will proceed while technology is improving," Vassiliadis told Bloomberg in a recent interview.

"You'd have to ask Daimler what the future of Li-Tec is." Evonik chief executive Klaus Engel remarked in October that low demand for electric vehicles as well as the fast-growing supply has placed pressure on prices. He remarked that around a three-digit-million figure and a lot of extra risk would be required to keep up with the industry's rapid development, which has prompted Daimler to seek a buyer for its battery activities. Uncertainty on the joint venture in terms of costs and other partners is also causing difficulties, said Vassiliadis.

Daimler has been reviewing options for Li-Tec since June 2013, including bringing in a new partner. Daimler is "convinced" of Li-Tec's technological expertise, a Daimler spokesman said in response to Vassiliadis's comments on the joint venture.

Li-Tec, however, hasn't generated much interest among possible buyers. South Korean company LG Electronics making a symbolic EUR1 ($1.37) bid for the battery cell business, Manager Magazin reported in December. Evonik holds 50.1 percent of Li-Tec, while Daimler owns the rest. [source: Bloomberg]

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