(Yicai Global) July 19 -- The world's biggest battery maker Contemporary Amperex Technology, also known as CATL, is teaming up with Chinese auto marque Guangzhou Automobile Group to form two electric vehicle power cell ventures to meet rising demand at the latter's subsidiaries.
The pair will sign the contract in China's southern city of Guangzhou today, CATL said in a statement this morning. The two new firms will have CNY1 billion (USD148 million) and CNY100 million in registered capital, with CATL taking a 51 percent stake in the larger company and GAC taking a 51 percent share of the other.
CATL and other Chinese EV battery makers have been looking to team up with their customers in a bid to stem overcapacity in the sector in recent years, a result of firms pre-empting China's booming plug-in car market. The Fujian province-based manufacturer announced yesterday that BMW would be taking over one of its production lines, as well as paying nearly CNY3 billion up front for power cells and obtaining the rights to buy up to CNY3 billion in CATL equity.
The larger of the joint ventures with GAC will focus on research and development, production, sales and aftersales services for lithium-ion batteries, power cells and other battery systems, while the smaller joint venture will handle technology development, transfer and consulting services for power battery systems.
Both firms will pay in cash, but the announcement did not disclose more details about the expected capacity of the two new factories.
Editor: James Boynton