Primavera makes $600m China cleantech investment

Envision sits within China’s “new infrastructure” sweet spot – hard technology and associated software that the government expects to define the next generation of economic growth. These areas are generally afforded strong policy support.

The company promotes wind and solar power as “new coal,” batteries and hydrogen fuel as “new oil,” and its artificial-intelligence-of-things (AIoT) networks that coordinate the hardware as the “new grid.” The broad net-zero enablement strategy is addressed through several subsidiaries and verticals, including a team in the Formula E electric vehicle racing series.

Primavera is investing in two entities: Envision Energy, which designs, sells, and operates smart wind turbines and energy storage products; and Envision AESC, which focuses on AIoT-powered batteries.

Envision has been in the wind power space since 2007, establishing itself as one of the largest wind turbine technology companies globally. Its products and projects are present in the likes of France, Mexico, Vietnam, Argentina, Montenegro, and Kazakhstan, as well as in China.

ASEC was established in 2007 as a joint venture with Nissan Motor, NEC Corporation, and NEC Tokin Corporation. Three years later, it started mass production of batteries for the Nissan Leaf. The company has manufacturing facilities in Japan, the US, and Europe – it broke ground on a China factory in 2019 – and its batteries have been installed in more than 600,000 vehicles to date.

“By leveraging our respective strengths in both domestic and international markets, including the strong ecosystem of Primavera's portfolio companies, we intend to support Envision’s global expansion and growth, empower many more industries to achieve zero-carbon transition, and promote mass adoption of renewable energy and cleantech in China and globally,” said Fred Hu, founder and chairman of Primavera, in a statement.

The private equity firm has previously invested in Zhuhai CosMX Battery, which claims to be China’s largest supplier of polymer lithium-ion batteries, bike-sharing business Hello, and electric vehicle producers Xpeng and Nio. Both Xpeng and Nio went public in the US, while Hello abandoned plans to follow suit earlier this year.

Primavera is in the process of raising its fourth fund, which has a target of $4 billion. Fund III closed on $3.4 billion in late 2019.

Private equity investors have been active along the electric vehicle (EV) value chain, from batteries to semiconductors to other components. In the past 18 months, battery makers like Svolt Energy Technology and Contemporary Amperex Technology (CATL) have received funding.

China wants renewables to account for over half of total installed energy capacity by 2025, up from 42.4% last year. However, utilization rates – especially in solar and wind – are relatively low. Non-fossil fuels made up 15.9% of the country’s primary energy mix in 2020, with most of that coming from hydropower.

There are also ambitious targets in the EV space. Production and sales of new energy vehicles (NEVs) have ranked first globally for six consecutive years and NEV penetration reached 11.6% in the first nine months of 2021. The goal is to reduce automotive-related carbon emissions by 20% from the peak level by 2035 and have NEVs account for half of all new vehicle sales.

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• Topics
• Greater China
• Cleantech
• Expansion
• Infrastructure
• Industrials
• China
• Primavera
• manufacturing
• Cleantech
• renewable energy
• Electric Vehicles