Chinese Lithium Giant Denies Rumours, More Players Extend Industry Chain to Downstream Automakers

In response to the market rumours that "Tianqi Lithium is considering taking a stake in SMART AUTOMOBILE", Tianqi Lithium, one of the top two lithium giants in China, told reporters on May 4 that it has no disclosures and undisclosures in this matter.

Geely Holdings responded that "there is no relevant information".

People familiar with the matter revealed to Bloomberg that “Tianqi Lithium is considering buying a minority stake in SMART AUTOMOBILE for roughly $100-200 million. Negotiations are currently underway, and this will also become a subsidiary of Smart Automobile, part of Auto's latest round of private funding.”

A high-ranking executive of Smart told cls.cn that "We do not comment on the content of the media's speculation." 

In January 2020, Geely Holdings and Mercedes-Benz established a smart brand global joint venture, Smart Motors, to jointly operate and promote the transformation and upgrading of the smart brand on a global scale. Sales centers were set up in China and Germany respectively. Previously, there was news in the industry that Smart was considering non-public fundraising, with a financing scale of $500 million to $1 billion. Smart is currently valued at about $5 billion and may attract interest from other automakers and strategic investment funds, sources said.
"Under the intensified competition, power battery companies have begun to enter a period of rapid reshuffle." Some industry analysts believe that with the price reduction of industrial-grade lithium carbonate, coupled with the slowdown in the growth rate of downstream demand for new energy vehicles and the destocking of the industry chain, the profitability of lithium battery companies has declined sharply.

A lot of power battery companies have reached cooperation with car companies in order to grab more market share. It is not only Tianqi Lithium that intends to extend its business to new energy vehicles in the industry chain. For example, CATL has held stake in Zeekr and AVATR. Ganfeng Lithium and Sunwoda Electronic became the shareholders of Dongfeng Motor Group’s FREE last year. Guoxuan Hi-Tech invested 10 million yuan for the B-round financing of Beijing Electric Vehicle in 2017.

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