Sinopoly's investment included a $2-million funding round this week, with the rest of the funds slated for delivery "in the coming months." As a result, Smith will resume production at its Kansas City plant this summer.
Smith stopped production in late 2013, ostensibly to line up a cheaper supply chain. The company, which received a $32-million grant from the US Department of Energy in 2010, used those funds to build 439 of an expected 510 demonstration trucks that would be field tested and the usage data sent back to the National Renewable Energy Laboratory (NREL).
In late 2011, Smith filed registration documents for an initial public offering that it said would be worth as much as $125 million and said it would move production to New York City, but those plans were later scuttled. Link to Sinopoly's statement here and read Smith Electric's press release below.
Partnership provides capital and access to Tier 1 supply chain
KANSAS CITY, Mo., May 12, 2014 /PRNewswire/ -- Smith Electric Vehicles (Smith Electric), the leading global producer of all-electric medium-duty commercial vehicles, today announced it has secured a $42 million commitment from Sinopoly Battery Limited (Sinopoly), a worldwide leader in the research, development, production, distribution and sale of Lithium-ion batteries and related EV products. 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."
About Smith Electric Vehicles
Smith Electric Vehicles Corp. is a leading global producer of all-electric commercial vehicles. Smith's zero-emission vehicles deliver superior performance to traditional diesel trucks, at greater operational efficiency and significantly lower cost. Smith partners with world-class brands to transform their entire fleets, help them operate more profitably and return energy to the grid.
The Smith Newton™ is deployed in several countries across a variety of applications, including parcel, food, beverage and equipment delivery and student and personnel transport. Smith Electric provides a full end-to-end approach to fleet transformation, comprising Smith Drive™ (fully integrated EV drive and control system maximizing vehicle performance), Smith Power™ (networked battery & power management system) and Smith Link™ (networked performance data). The company is based in the United States, operates a manufacturing facility in Kansas City, Mo., and has an established research & development center in Newcastle, U.K.
About Sinopoly Battery Limited
Sinopoly is listed on the Main Board of The Stock Exchange of Hong Kong Limited (Stock Code: 00729). Sinopoly and its subsidiaries are principally engaged in (i) R&D, production, distribution and sale of Lithium-ion batteries and related products; (ii) design and manufacture of EV; and (iii) leasing business of EV. For further information about products and business of Sinopoly, please visit the Company's website at www.sinopolybattery.com.