#GSRCapital

Earlier this month, Nissan announced it was in the final stages of sealing a deal to sell its entire EV battery business to Chinese investment firm GSR Capital. The sale includes battery plants in Tennessee, England, and Japan, with a preamble where the Japanese automaker has to buy up minority shares of Automotive Energy Supply Corp. from NEC Corp.

From there, it can sell off the business to GSR for a cool $1 billion — which isn’t a bad deal for the Chinese company. Nissan used around $1.4 billion in government funds building its U.S. factory in 2010, and the remaining plants weren’t exactly cheap to build. So why is Nissan selling them off?

For starters, the Leaf hasn’t been the sales leader the manufacturer hoped for. Even though global deliveries surpassed the 250,000-unit milestone in December 2016, Leaf sales don’t go beyond 50,000 units annually. By electric vehicle metrics, that’s still a win. However, the Tennessee factory is capable of producing 200,000 complete EV battery packs a year — well beyond the company’s current needs.