(Yicai Global) Jan. 21 -- China's CNGR Advanced Material will invest CNY23 billion (USD3.6 billion) to build a new energy vehicle battery materials plant in southwestern China to meet the demand coming from clients such as Tesla.

The factory, located in the Guangxi Zhuang Autonomous Region, will have the capacity to make 150,000 tons of ternary precursor materials and 70,000 tons of nickel and cobalt products every year, the Guizhou-based company, which counts LG Chem and Samsung SDI as some of its clients, said in a statement yesterday. 

Using ternary precursors in NEV batteries increases the vehicles' range. Worldwide, such shipments should reach 1.5 million tons by 2025, a more than fourfold increase from 2019, according to technology research institute GGII. 

CNGR had two factories in China as of last December. The Guizhou and Hunan plants could make 110,000 tons of ternary precursors and 25,000 tons of cobalt tetraoxide per year. The factories are now running at full capacity due to the huge demand, the statement added.

The first phase of the Guangxi project will cost the firm CNY10 billion (USD1.5 billion) and take four years. After the parent secures land use rights, it should take a maximum of six months to start construction. Production should start within a year after that.

CNGR's stock price [SHE:300919] rose 2.4 percent to CNY92.70 (USD14.40) this afternoon.

Editor: Emmi Laine