Chinese industry’s pursuit of all things green and technological looks set to continue with an investment in the cash-strapped U.S. hybrid electric carmaker Fisker. Dongfeng Motor, Geely Auto and Beijing Auto have all reportedly been in conversations with the California-based company that is looking to raise $200 million-300 million to develop its new sedan, the Atlantic, on which its future rides.
The car company has also been talking to Wanxiang, the car parts group that had recently bought Fisker’s main battery supplier, A123 Systems. We understand that there is also a European car maker in the mix. Discussions are expected to be concluded this quarter. A key point is whether majority control would pass to one partner–Dongfeng is reportedly seeking an 85% stake–or whether to have multiple minority partners.
We recall that another U.S. electric carmaker, Tesla, partnered with Toyota and Daimler before becoming a public company in 2010. Fisker looks to be traveling the same road, which would make it a doubly attractive destination to a Chinese partner.
However, a Chinese investment could be controversial in the U.S. Fisker got a $529 million line of credit from the U.S. energy department in 2009, though this was frozen last year with $200 million outstanding. The Obama administration’s support for green technology companies has become a touchstone for the president’s opponents of industrial policy following the collapse of Solyndra, a solar cells maker prominently backed by the administration before going bankrupt.
Americans’ attitudes to Chinese investment in the U.S. are changing, as the U.S.’s approval of CNOOC’s acquisition of Canada’s Nexen, and Wanxiang’s takeover over bankrupt A123 show. But scratch the surface and raw nerves are still to be found. To mitigate the political opposition, any deal with a Chinese company would probably have to ensure that production of the Atlanta would move from Finland to Delaware, as planned, and not move directly to China.