Nissan Cancels $1 Billion Sale of Battery Business to China’s GSR Capital

The sale was originally scheduled to close in December 2017.

Nissan cancelled a sale of its electric-car battery unit to China’s GSR Capital potentially worth $1 billion, reports Reuters. The Japanese automaker is reportedly still looking for a buyer.

The deal was cancelled because the Chinese investment firm did not have the funds to purchase Nissan’s Automotive Energy Supply Corp. (AESC), the automaker said Monday. The June 29 deadline slipped by, killing a deal that was announced almost a year ago. 

AESC has produced all battery packs for the Nissan Leaf, the bestselling electric car in history. It currently operates battery factories in Japan, the United States, and the United Kingdom. Other automakers, like Tesla and Daimler, have sought to emulate Nissan and bring battery production in-house.

But Nissan has been looking to sell AESC for sometime. The automaker believes it can get higher-performance lithium-ion battery cells from an outside supplier at a lower price. Most other automakers currently source their battery cells from outside firms. Nissan’s partner Renault already gets cells for its electric cars from South Korean firm LG Chem.

The deal to sell AESC to GSR was originally scheduled to close in December 2017, but was delayed multiple times. That was due in part to negotiations involving NEC Corp., which holds a 42 percent stake in the battery business, and its subsidiary NEC Energy Devices, which holds a 7 percent stake. Nissan holds a 51 percent stake in AESC.

Nissan still plans to sell AESC, but it’s unclear who will buy it. Major suppliers, including LG Chem, Samsung SDI, Panasonic, and CATL are said to have discussed purchasing the battery unit, according to Reuters. But Yoshio Ito, head of Panasonic’s automotive business, told reporters Monday that the Japanese company isn’t interested in acquiring an existing battery operation. Investors believe a sale of AESC may be difficult because other companies have developed better battery technology.

Regardless of where it gets the batteries, Nissan is still committed to electric cars. The automaker has said it will launch eight new all-electric models over the next few years, including a crossover based on the IMx concept, a kei car for Japan, and models aimed at the Chinese market. Its Infiniti luxury division is expected to get at least two all-electric models by 2022. Nissan wants to sell a million electrified vehicles—including battery-electric cars and hybrid—by 2022.