A year after funneling money into companies creating electric vehicles, charging infrastructure, energy storage devices and related technologies, investors have slowed amid economic and geopolitical turbulence.
Global M&A activity in 2022 involving companies developing such tools to decarbonize the power and transportation sectors collapsed to just $7.76 billion through July, marking a significant deceleration from $81.88 billion in all of 2021 and $31.45 billion in 2020, according to S&P Global Market Intelligence data.
That includes special purpose acquisition company transactions, which have cooled significantly, prompting several major underwriters to retreat.
Through July, the largest announced EV SPAC deal in 2022 is Chijet Motor Co. Inc.'s proposal to acquire Deep Medicine Acquisition Corp. in a reverse merger valued at $2.26 billion. Chijet expects to yield approximately $127.8 million in cash to support EV manufacturing in China.
Another major EV-related deal this year is SK ecoplant Co. Ltd.'s bid to purchase Singaporean battery recycler TES-Envirocorp Pte. Ltd. for $1 billion. In July, Sensata Technologies Holding PLC completed a $580 million cash purchase of Vermont-based energy storage specialist Dynapower Co. LLC.
Such M&A activity pales in comparison to the multibillion-dollar deals of 2021, which included U.S.-based EV aspirant Lucid Group Inc.'s $11.75 billion SPAC deal and Panasonic Holdings Corp.'s sale of a minority stake in EV and energy storage company Tesla Inc. for roughly $3.6 billion.
Markets mixed
Koch Strategic Platforms LLC, an investment arm of industrial conglomerate Koch Industries Inc., was one of the more prolific equity investors in battery supply chains in 2021 and has completed a few additional transactions this year.
That includes a $275 million coinvestment into Massachusetts-headquartered lithium-metal battery upstart SES AI Corp. and leading a $90 million series D round for California company Wildcat Discovery Technologies Inc., which aims to launch an EV "super cell."
The biggest battery deal of the year so far is South Korean company LG Energy Solution Ltd.'s $10.7 billion initial public offering, completed in January, Market Intelligence data shows. China-based Contemporary Amperex Technology Co. Ltd., the world's largest battery maker, raised roughly $6.72 billion in an equity transaction that closed in June.
Both companies produce lithium-ion batteries for EVs and energy storage.
Overall, makers of EVs, batteries, energy storage systems, and related materials and components raised nearly $60 billion in debt and equity capital markets, as well as from private equity and venture investors, through July, according to Market Intelligence data. That compares with $157.25 billion in 2021 and $103.57 billion in 2020.
In 345 private equity and venture capital rounds, companies raised $18.13 billion through July. While tracking behind 2021 levels, that is more than such deals yielded annually between 2017 and 2020.
With five months remaining in 2022, equity offerings for EV, energy storage and related companies have attracted just 33% of the 2021 transaction value of $83.95 billion, according to the data. Debt offerings through July were at 38% of the 2021 transaction value of $36.20 billion.
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