(Yicai Global) May 11 -- Shares of Gotion High-Tech, whose biggest investor is Volkswagen Group, jumped after the Chinese electric vehicle battery giant said it will supply lithium iron phosphate battery cells to the German carmaker in markets outside of China.
Gotion [SHE: 002074] finished 4.7 percent higher at CNY28.80 (USD4.15) per share today, after earlier surging by as much as 7.1 percent. The broader Shenzhen market ended flat.
The deal is another breakthrough for Gotion after the Hefei-based firm previously become VW's designated supplier of ternary and lithium iron phosphate battery cells in China, it said late yesterday. The unified cells will have the same design and specifications as those in China and be used in VW's new energy vehicles sold in overseas markets, it added.
The two companies will decide the pricing based on fair market value, with actual purchase volumes based on the settlement prices of signed orders, Gotion pointed out, without disclosing further details.
The deal will not greatly affect Gotion's business performance this year, but it will have a significant and positive impact in the future, the firm said.
The partnership is an major step for Gotion after bringing in and working with its strategic investor to explore the global market and is an important milestone in developing world-renowned auto clients, it added.
Gotion brought in Volkswagen China Investment as a strategic investor via a private placement of shares at the end of 2021, with the carmaker further hiking its stake afterward. VW is Gotion's largest investor, with a 24.8 percent interest, the battery maker's latest annual earnings report showed.
Gotion will develop VW China's first-generation unified cells, which will be used in 80 percent of its mass-produced electric cars in the country, according to an agreement the two inked in 2021. Gotion will be VW Group’s unified cells supplier in the future when conditions are met, the pair noted at the time.
Editor: Martin Kadiev