Smith Electric Vehicles, the producer of all-electric medium-duty commercial vehicles, announced it has secured a $42 million commitment from Sinopoly Battery Limited.
The first $2 million in funding closed today, and the remainder will be invested in two tranches pending milestones to be achieved by both companies in the coming months.
The $42M investment will position Sinopoly as a strategic shareholder in Smith Electric. Under the agreement, Sinopoly will become Smith Electric’s exclusive supplier for batteries in vehicle applications that are compatible with Smith Electric’s platforms and customer requirements. Sinopoly will also become a preferred supplier for certain electric vehicle components that can be manufactured in its Hangzhou facility.
“Demand for all-electric commercial vehicles is rapidly increasing in China, and Sinopoly’s investment in Smith Electric highlights the important role we will play in the global marketplace,” said Bryan Hansel, chief executive officer of Smith Electric Vehicles. “This investment provides both companies with the opportunity to leverage the synergies between our operations while Smith maintains the financial and operational flexibility to scale manufacturing, transition and strengthen our supply chain, and move toward company profitability.”
“Smith is an internationally renowned supplier of EVs. Sinopoly’s investment in Smith represents an important and strategic advance step in establishing Sinopoly as a significant integrated player in the EV industry,” said Mr. Cao Zhong, the chairman and executive director of Sinopoly Battery Limited. “The combined expertise of Smith and Sinopoly, which will adopt the name of FDG Electric Vehicles Limited shortly, along with the macro-subsidy policy for alternative energy vehicles, uniquely positions us to capitalize on the rapidly growing commercial EV market in China and the U.S.”
Smith Electric will resume production in its Kansas City, Missouri, facility in mid-summer 2014. The company temporarily suspended production in the fourth quarter of 2013 in order to transition its supply chain to Tier 1 suppliers, which will enable Smith Electric to produce its vehicles at a lower cost.
“Sinopoly’s investment in Smith Electric Vehicles marks an important milestone in recapitalizing and restructuring the company in preparation for the public market,” said Charles Gassenheimer, chairman of the board of Smith Electric Vehicles. Gassenheimer was appointed chairman in April 2014, and brings extensive private and public financial markets experience, as well as significant operational expertise in the EV industry. He added, “This agreement underscores Sinopoly’s institutional understanding of the global electric vehicle industry and the company’s commitment to working with Smith Electric to create a major player in the market.”
Sinopoly is listed on the Main Board of The Stock Exchange of Hong Kong Limited. Sinopoly and its subsidiaries are principally engaged in R&D, production, distribution and sale of Lithium-ion batteries and related products; design and manufacture of EV; and leasing business of EV.
