BUSINESS

Chinese Government Takes Over Faltering Battery-Maker Farasis

Published: Apr. 18, 2025 8:09 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

Farasis Energy has been struggling to keep up with the electric vehicle battery industry’s protracted price war. Photo: Farasis Energy

The Guangzhou government is taking control of Farasis Energy Gan Zhou Co. Ltd. (688567.SH), offering a lifeline to a battery-maker struggling with mounting losses.

Two shareholders of Farasis Energy sold a combined 5% stake in the company to a clean energy investment company for over 970 million yuan ($133 million), according to a stock exchange filing on Tuesday. Guangzhou Industrial Investment Holding Group Co. Ltd., which the Guangzhou government controls, owns just under 50% of the investment company, according to business data provider Tianyancha.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

The Guangzhou government has taken control of Farasis Energy, a struggling battery maker, by acquiring a 16.15% stake through Guangzhou Industrial Investment Holding Group.
Farasis Energy reported significant net losses, totaling 1.87 billion yuan in 2023, and faces declining market share due to competition from cheaper lithium-iron-phosphate batteries.
Once an industry leader, Farasis Energy's shipments and rankings have dropped significantly, with its domestic sales declining 4.7% year-on-year in early 2025.

AI generated, for reference only

Who’s Who

Farasis Energy Gan Zhou Co. Ltd.: Farasis Energy Gan Zhou Co. Ltd. is a Chinese battery-maker specializing in NMC ternary lithium batteries. Despite once thriving, it has faced mounting losses due to competition with LFP batteries and rising costs. Founded in 2009, it supplies domestic automakers and Mercedes-Benz. Guangzhou Industrial, under the Guangzhou government, recently acquired a controlling stake in the struggling company, which reported significant losses and declining shipments, ranking it below the top 15 in China's battery market as of March 2025.

Guangzhou Industrial Investment Holding Group Co. Ltd.: Guangzhou Industrial Investment Holding Group Co. Ltd., controlled by the Guangzhou government, now indirectly controls Farasis Energy through a clean energy investment company in which it holds just under 50%. Guangzhou Industrial and its affiliates collectively own a 16.15% stake, making it the controlling shareholder of Farasis Energy.

Tianyancha: Tianyancha is a business data provider mentioned in the article. It provides information on corporate ownership and affiliations, in this case, confirming that Guangzhou Industrial Investment Holding Group Co. Ltd., controlled by the Guangzhou government, holds just under 50% of the clean energy investment company involved in Farasis Energy's stake purchase.

Beijing Electric Vehicle Co. Ltd.: Beijing Electric Vehicle Co. Ltd. is a domestic automaker that secured battery supply contracts with Farasis Energy between 2015 and 2017.

Jiangling Group Electric Vehicle Co. Ltd.: Jiangling Group Electric Vehicle Co. Ltd. is one of the domestic automakers that secured a supply contract with Farasis Energy between 2015 and 2017 for the company's nickel-manganese-cobalt (NMC) ternary lithium batteries.

Guangzhou Automobile Group Co. Ltd.: Guangzhou Automobile Group Co. Ltd. is one of the domestic automakers with which Farasis Energy previously secured supply contracts for its batteries.

Great Wall Motor Co. Ltd.: Great Wall Motor Co. Ltd. is one of the domestic automakers that secured supply contracts with Farasis Energy between 2015 and 2017 for battery production.

Mercedes-Benz Group AG: Farasis Energy has been a supplier to Mercedes-Benz Group AG since 2018 under a supply contract that extends through 2027.

AI generated, for reference only

What Happened When