Geely's Fisker Acquisition Could Be Boon for Plug-in Hybrids
According to a report earlier this week from Reuters, Fisker Automotive is looking to finalize a sale of its company by mid-March. Only two bids are currently on the table, both coming from Chinese corporations.
Geely is the lead. According to Reuters sources, Geely's bid is in the $200 million to $300 million range and could provide the Chinese firm with up to 85 percent stake of Fisker Automotive. It's believed that Geely's ability to act quickly pushed it into the lead in the bidding war. Sources also said that Geely is "more serious" and "passionate" about Fisker and its core technologies.
What's at stake? First of all, keep in mind that Geely bought Volvo (for $1.3 billion) in 2010. Volvo has been working on its on electric cars and plug-in hybrids for a few years. Limited production of the C30 Electric began in 2011, and production (also in very small numbers) of the V60 diesel plug-in hybrid started in November 2012. Sales are focused in Europe, and it's still unclear if and when Volvo will offer plug-in vehicles in North America.
In January 2012, John Maloney, president and CEO of Volvo Cars of North America, expressed his preference for plug-in hybrids, in an interview with PluginCars.com. “Pure electric is going to be, in my view, a very small part of the market” he said. “I don’t think people want a car that has compromises.”
Now, consider that a Fisker Automotive sale to Geely would give Fisker the funds needed to start building its second and more affordable model, the Atlantic plug-in hybrid, which is expected to start at around $55,000 and be a higher volume vehicle for Fisker.
Product and technology sharing between companies, even when owned by the same parent organization, is never as easy as expected. But it's a nice thought to consider the potential of Geely, Fisker and Volvo to work together to become a major global player in the EV market.
Meanwhile, Dongfeng, the other Chinese firm is this bidding war, has apparently been knocked down a notch due to the fact that its a "Chinese state-owned enterprise." Reuters suggests that this direct tie with China's government could make for a drawn out purchase of Fisker due to the "multi-layered decision-making structure" present in most Chinese state-owned organizations.
Geely, on the other hand, is run by founder and chairman, Li Shufu. According to Reuters, Geely is also better able to execute on cross-border acquisitions, as it proved in its 2010 deal to acquire Volvo. The deal is expected to be finalized in about a month.
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