US battery maker Ener1 and China’s Wanxiang Electric Vehicle Co. signed an agreement to jointly manufacture lithium-ion cells and battery packs for the Chinese market.

The two companies said their cooperation would combine US technology with Chinese manufacturing capability. The batteries will be used in products built by Wanxiang’s light- and heavy-duty automotive and power-grid customers.

"Wanxiang and Ener1 share a vision to help fulfill our country's strong commitment to electrifying transportation on a mass scale and to deploy lithium-ion technology to improve the effectiveness of the power grid," said Lu Guanqiu, founder and chairman of Wanxiang Group.

The Chinese government has set an annual production goal of 500,000 hybrid or all-electric cars and buses by 2012.

The new venture - Zhejiang Wanxiang Ener1 Power System Co., Ltd - will use Wanxiang Electric Vehicle's existing 553,000-square-foot facility in Hangzhou. The joint enterprise is expected to build 40,000 electric-vehicle battery packs a year by 2014.

Ener1 Chairman and CEO Charles Gassenheimer said the joint venture will give the US battery maker access to an existing plant and an established customer base in China. “Applying our advanced battery technology will enable us to hit the ground running in serving what is potentially the largest advanced battery market in the world," he said.

Wanxiang is one of China’s biggest automotive supplier groups with annual sales of 10 billion dlrs.

wanxiang battery plant.automotiveIT

Wanxiang operates large battery plants in China

Wanxiang Electric Vehicle will have a 60-percent equity stake in the joint venture. The company will contribute property, plant, equipment, and customer relationships, including State Grid, SAIC Motor, Dongfeng Motor, Guangzhou Auto and Yutong.

Ener1, with a 40-percent stake in the venture, will provide intellectual property, engineering, manufacturing and technical expertise.

Ener1, Inc. is a publicly traded New York-based energy technology company that develops compact, lithium-ion-powered battery solutions for the transportation, utility grid storage and consumer markets.