Tycoons battle for green battery market
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Tycoons Terry Gou and Wang Chuanfu are waging an escalating war for the top spot in the lithium battery sector. |
Tycoons Terry Gou and Wang Chuanfu are waging an escalating war for the top spot in the lithium battery sector. Gou, Taiwan's wealthiest entrepreneur, is making substantial inroads into the mainland lithium battery industry, till now dominated by Wang Chuangfu, founder of BYD and the richest man on the mainland.
According to reports, Terry Gou's Hong Chuang has just concluded a deal to buy out a financially troubled Taiwan-based lithium battery manufacturer. The acquisition was made at a bargain price and is considered a bold move by Gou to enter lithium battery industry.
But the lithium battery sector is where Wang Chuanfu's BYD started up. BYD is now the second largest lithium battery maker in the world.
Terry Gou has long coveted the battery sector. The latest purchase is not the first time he has showed interest in the area.
As early as May this year, it was reported that Terry Gou's Zheng Wei Group was to partner with American battery maker Boston-Power, a sector start-up with a green and highly-efficient lithium battery patent and a production base in Guangdong.
The two moves will allow Terry Gou to create a complete production line for lithium batteries. Meanwhile Wang Chuanfu's empire is expanding from batteries into the auto sector. Its experience in the battery sector has naturally led to a move into manufacturing green cars.
As BYD cemented its image as an innovative and green company, Warren Buffet paid HK$1.8 billion (US$232 million) for a 10 percent stake in the growing company. Boosted by the investment, BYD's shares jumped from 13 dollars to 72 dollars, catapulting Wang Chuanfu to the top of the Hurun rich list this year.
Terry Gou has some hurdles to clear before he can compete effectively with BYD. His Hon Hai shares slumped this year as a result of the financial crisis; and his lofty ambition to open 10 thousand electronics shops within three years now sounds far-fetched; Hon Hai's latest quarterly results fell short of expectations, despite showing a bounce back from earlier losses.
The battle between Terry Gou and Wang Chuanfu began as early as 2006, when Terry Gou's Foxconn accused BYD of stealing its trade secrets and causing a 5.13-billinon-yuan (US$754 million) loss to Foxconn. The case has still not been settled, although four BYD employees have received sentence.
Wang Chuanfu emerged unscathed from the case and BYD is still the favorite with investors. It would seem a wise move for Terry Gou to put his resentment aside and focus on his plans for the green battery sector.
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