French billionaire’s e-car venture becomes huge success

Bloomberg

French billionaire Vincent Bollore’s push into electric vehicles has been a huge success, at least in terms of publicity and eye-catching contracts. For investors, it hasn’t worked out so well.
Shares of his battery company, Blue Solutions SA, have plunged by more than two thirds since peaking 2 1/2 years ago, wiping out 775 million euros ($823.5 million) of shareholder value. They now fetch less than they sold for in the Quimper, France-based company’s initial public offering in 2013. Listing the business shined a light on Blue Solutions’ achievements — its novel lithium metal polymer battery presents no risk of overheating and explosion, contrary to lithium-ion models such as those in Samsung’s fire-prone Galaxy Note 7 phones. The downside: The batteries need to be kept warm, which mostly limits them to uses such as car-sharing services with charging stations.
Bollore’s car-sharing operations, which use Blue Solutions’ batteries, are losing money in every city in which they operate. And at a time when sales are surging for electric vehicles such as Tesla Motors Inc.’s high-end Model S, the billionaire has struggled to sell his cars to individuals.
“As times goes by, there are more doubts on Blue Solutions’ technology,” said Massimo Baggiani, the Turin, Italy-based manager of the Symphonia Electric Vehicles Revolution fund, which holds the shares. He said he sees no recovery “unless there is some kind of a new visibility on the stock, on the strategy.” Still, he’s holding the shares to give the management a chance to highlight the success of their business, and because electric cars are part of a fast-growing market, he said.
Blue Solutions’ IPO was aimed at gauging investors’ opinion of the technology, said Chief Executive Officer Gilles Alix. “If you’re a shareholder, you have to be patient,” he said in a phone interview. “It’s a long-term value, because batteries are a very, very long-term product which hasn’t totally found its market — but the potential is enormous.”
Bollore is both a patient investor and an adventurer. He has let his company spend more than 2 billion euros on a battery technology that’s yet to become consistently profitable.
The 64-year-old billionaire juggles many balls: He’s the chairman and co-chief executive officer of Bollore Group, and chairman and the biggest shareholder in media conglomerate Vivendi SA. With Vivendi, Bollore has launched raids on Silvio Berlusconi’s Mediaset SpA and video-game maker Ubisoft Entertainment SA, in both cases against the wishes of the founding families.
The electric-car project has earned Bollore plenty of headlines and a string of contracts to operate car-sharing services in Paris, Turin, Indianapolis and other cities, with batteries from Blue Solutions in cars developed by Bollore Group. The company also sells a consumer version of the Bollore car, vehicles for transit systems and energy-storage products.
Blue Solutions fell 1.6 percent to 11.89 euros at 10:40 a.m. in Paris, giving the company a market value of 342.9 million euros. The French weekly newspaper Le Canard Enchaine reported this month that Autolib, Bollore’s Paris car-sharing service, is expected to have a 179 million-euro deficit by the end of the contract in 2023, of which two thirds will be assumed by taxpayers, since losses for Bollore are capped at 60 million euros. Blue Solutions underestimated the development means required for Autolib when it was first created, Alix said. “It was so innovative that we didn’t know its cost,” he said, adding that “today everything’s under control.” The city of Paris imposed charging stations in the contract where cars are dropped off but aren’t being picked up by users, causing a lack of vehicles at more popular stations, he said.
“Around 200 stations are blocking the system and making us lose money,” out of a total of 1,100, he said. “I think we can make money on Autolib.” Bollore’s car-sharing service in Indianapolis is close to reaching break even, he said. Future installations in Singapore and Los Angeles benefit from large subsidies, Alix said. He added that he expected the Singaporean service to generate profit.