Smith sign MASSIVE Chinese joint venture.
A Kansas City company that makes electric trucks for such brands as Coca-Cola and Fed-Ex has figured out where its next customers and investors are: China.
Smith Electric Vehicles has cut a deal with Wanxiang under which the Chinese manufacturer will put up $75 million to form a joint venture with Smith to make electric school buses and commercial vehicles in China. The Chinese manufacturer has also made a $25 million equity investment in Smith, the companies announced today.
Deals between U.S. manufacturers and Chinese counterparts are common when those U.S. manufacturers want to gain entry to that immense market. Further, China has been moving aggressively to develop cleantech industries such as electric vehicles, solar panels, and wind turbines.
So it’s not a huge surprise that Smith would be forging ties with Wanxiang.
“Wanxiang’s high-quality precision-manufacturing capabilities and purchasing relationships bring significant value to our business in our current stage of development,” said Bryan Hansel, chief executive officer and chairman of Smith, in a release. “Wanxiang is one of China’s most respected companies, and we look forward to a long, mutually beneficial relationship that advances the global commercial electric-vehicle industry.”
The timing of the deal is also no great surprise, since it comes during the visit of Chinese Vice President Xi Jinping, who is expected to become the next leader of China.
“Smith’s market leadership in the U.S. and Europe bring valuable experience and technology to address the significant opportunity for all-electric commercial vehicles in China," said Pingyi Li, the executive director of Wanxiang EV Co. Ltd. "Working together, we see tremendous opportunity to serve this growing market and to leverage volume and cost synergies back into Smith’s global business. We are pleased to have them as our partner."
Smith had filed for an initial public offering last year, but has yet to go public. Katie Fehrenbacher of GigaOM reports that the company hasn’t pulled that IPO, but is in the process of raising more money from investors.
(portfolio.com)
