Lifan to invest 670m yuan to research EV battery technology

Gasgoo.com (Shanghai June 26) - Right on the heels of SAIC and Chery, Lifan Holdings has also entered the electric vehicle battery field, with the manufacturer announcing today that will invest 670 million yuan ($106.14m) to research and develop its own lithium batteries, the Shanghai Securities Journal reported today.

According to an official statement, the funds will be used by a local subsidiary of Lifan to build a production site and research institute in its home city of Chongqing. 417 million yuan ($106.14m) of the funds will be used to build the site, while 252.75 million yuan ($40.04m) will be used to purchase various floating assets. Investment will be undertaken over two phases.

Upon completion, the production site will be able to annually produce two million motorcycle storage batteries, 1.65 million automobile storage batteries, two million auxiliary batteries and 10,000 lithium batteries. Construction work is schedule to take three years.

There are many who believe that the company's decision to enter the EV battery field is due to decreasing profits in the motorcycle and automobile industries. In addition to lowering production costs, developing its own battery technology may help Lifan improve its overall brand image.

Lifan, traditionally a motorcycle manufacturer, has only recently entered the passenger automobile market. It also makes automobile engines. In 2011, the manufacturer earned 8.63 billion yuan ($1.37b) in business returns and 390 million yuan ($61.78m) in net profits. The figures represented year-on-year growth of 27.46 percent and 2.18 percent, respectively.