(Yicai Global) March 24 -- The stock price of Chinese battery supplier Farasis Energy sank to a half-year low today after its client BAIC Group was forced to recall 31,963 electric vehicles due to battery defects.
Farasis Energy [SHA: 688567] fell as much as 9.9 percent to CNY24.80, the lowest since September, before closing 5.9 percent lower at CNY25.89 (USD3.97).
BAIC’s three subsidiaries will recall the 31,963 EVs made between Nov. 1, 2016 and Dec. 21, 2018 because of battery defects, Farasis Energy said yesterday, adding that the move will cost CNY30 million (USD4.6 million) to CNY50 million, all of which will be paid by Farasis Energy.
The recall is due to a potential safety hazard from degradation of the batteries and the possibility of fire under certain circumstances.
Farasis Energy will use specialized equipment to inspect the battery packs and upgrade the software on the recalled vehicles, the announcement said, noting the firm will change any batteries that cannot meet the requirements after the repair.
Based in Ganzhou, Jiangxi province, Farasis Energy specializes in making lithium manganese auto power packs and related products. Farasis Energy Asia Pacific is the firm’s largest shareholder with a 22.68 percent stake, and Daimler Greater China owns 3 percent.
BAIC Group was Farasis Energy’s biggest client between 2017 and 2019. Power batteries sold to BAIC Group made up 87.57 percent of Farasis Energy’s total battery sales in 2017, 83.58 percent in 2018 and 47.58 percent in 2019, but the figure dived to 0.14 percent last year, according to data from Farasis Energy. The firm did not mention whether the sharp decline was related to battery quality defects.
Editor: Tom Litting