Fears over Chinese sources stealing outsider intellection property for advanced vehicle technologies and exploiting it for their own goals has always been in the background in Chinese market investments. Observers will be watching to see what happens with the new merger between EV lithium ion battery maker and Chinese auto supplier Wanxiang Group Corp. Part of the investment and ownership stake for Wanxiang is bringing the A123 technology to the Chinese market.
Here are a few issues to think about:
• The topic has been a hot one in Washington during an election year. A123 receives U.S. Dept of Energy grants tied into keeping production and jobs in the U.S.
• Some industry executives including engineering chiefs from two global auto makers expressed concern at the prospect that A123 could lose control of its fiercely guarded battery design and manufacturing know-how. They are particularly worried that Wanxiang might shift part of A123’s research and development activities to China.
• The enabling technology was in part developed by a Massachusetts Institute of Technology (MIT) professor who is one of A123’s founders, and is patented.
• People close to Wanxiang and familiar with its A123 investment, said the company would behave responsibly with A123’s intellectual property, and noted the U.S. firm already produces advanced batteries in China. Fears of A123 losing control of its intellectual property are overblown, they said.
• Wanxiang is a major auto parts supplier and has a relatively large presence in the United States having bought up distressed parts makers over the past decade.