China Car Parts Giant Boosts Energy Credentials With Commodities Joint Venture

(Beijing) — Top car-parts maker Wanxiang Group said it will form a joint venture with U.S. energy commodities specialist Hartree Partners to trade and market commodities within China and also on a cross-border basis.

The announcement comes as Wanxiang moves beyond its focus as a maker of parts for traditional cars and into new-energy technologies, including hybrid vehicles, electric-car batteries and other electric storage technologies.

The new Shanghai-based venture, Wanxiang Hartree Commodities Co. Ltd., will create and operate a commodities trading platform, the two sides said in an announcement on Thursday. They did not specify what commodities will be traded, but both Wanxiang and Hartree have strong backgrounds in energy-related products and services.

The pair said the venture was officially established in March, though no financial terms were disclosed.

“The joint venture represents each firm’s recognition of the critical importance of the Chinese market to the interconnectedness of the global markets,” said Han Youhong, president of Wanxiang Resources Co. Ltd., Wanxiang’s unit that is the official joint-venture partner. “Wanxiang Group brings unparalleled onshore knowledge and insights to the venture, and Hartree Partners provides the global expertise of a respected participant in the commodity space with a long history of investment excellence.”

Wanxiang has been one of China’s more-active auto-parts makers in overseas buying, especially in new-energy technologies, which have become a priority area for development by Beijing. In 2013, it purchased bankrupt U.S. lithium-ion battery maker A123 Systems, and in 2014 it bought the assets of defunct U.S. plug-in hybrid car maker Fisker Automotive. It renamed the company Karma Automotive, and late last year received permission to build a factory in China capable of making up to 50,000 such cars annually.

Later, Wanxiang sold A123’s grid-scale battery business to Japan’s NEC Corp., and in 2014 that pair announced their formation of a joint venture to pursue grid energy storage opportunities in China.

Contact reporter Yang Ge (geyang@caixin.com)