(Yicai Global) Aug. 30 -- Shares in Farasis Energy soared today after the Chinese lithium battery maker said it is building a new production base with an annual battery capacity of 24-gigawatt hours, more than twice its current output, as demand for new energy vehicles soars.

Farasis Energy’s share price [SHA:688567] closed up 6.18 percent at CNY39.84 (USD6.16) today.

Located in Wuhu, southeastern Anhui province, this will be Farasis Energy’s third production base in China, the company said yesterday. Existing plants in its headquarters of Ganzhou, eastern Jiangxi province and Zhenjiang, eastern Jiangsu province currently have a combined annual output of 13 GWh, which is expected to rise to 21 GWh by the end of the year.

The first phase will have a production capacity of 12 GWh and is expected to start construction in October and to be finished by September 2023, it said. The second phase will be launched according to the needs at the time. No details were given about the size of the investment nor how the funds will be raised.

Farasis Energy is in the midst of rapid expansion to meet the craze for electric cars. It is also building additional capacity of 10GWh in Germany and is setting up a joint venture with Geely, in which the carmaker holds 65 percent equity, that will produce at least 20 GWh of EV batteries a year for Geely’s use.

The investment is affecting the firm’s bottom line and in the first half its losses widened 29 percent from the same period last year to CNY226 million (USD35 million), according to its latest earnings report released yesterday. This was despite revenue tripling to CNY877 million (USD135.5 million) as orders soar.

Once the new factories meet their production targets, the company’s profit margin is expected to improve, it added.

Farasis Energy is one of China’s biggest suppliers of soft-packing power batteries, which have a soft polymer shell as opposed to hard steel or aluminum casing and as a result are lighter and less likely to explode. The firm held 20 percent market share in China last year, according to media and newly-emerging sector research firm SPIR.

German carmaker Daimler, which hold a 3 percent stake in Farasis Energy, is its second biggest client and purchased CNY196 million (USD30.2 million) worth of batteries in 2020.

Editor: Kim Taylor