(Yicai Global) Nov. 15 -- Yongtai Technology, a Chinese manufacturer of inorganic fluoride products, is selling a 25 percent stake in its main battery raw materials subsidiary to battery giant Contemporary Amperex Technology for CNY500 million (USD78 million).

CATL will purchase a quarter of Shaowu Yongtai High-tech Materials to ensure its supply of lithium hexafluorophosphate, a key ingredient of electrolyte materials commonly used in lithium-ion batteries, Yongtai Tech said yesterday.

The move, however, displeased investors amid a general sell-off in the new energy vehicle and EV battery sectors. Yongtai Tech’s share price [SHE:002326] plummeted 10 percent to CNY63.10 (USD9.89). CATL’s share price [SHE:300750] closed down 3.28 percent at CNY620.95.

Yongtai Tech said last month that it plans to hike Yongtai High-Tech’s production of lithium hexafluorophosphate to 67,000 tons a year from the current 2,000 tons. It is also building a lithium bisfluorosulfonylimide solution production line, another important electrolyte, with an annual output of 67,000 tons in nearby Shaowu. The two projects will cost CNY792.7 million (USD124 million)

CATL is already a good customer of Linhai, southeastern Zhejiang province-based Yongtai Tech and in July placed a long-term purchase order for three different electrolytes including lithium hexafluorophosphate. The Ningde, southeastern Fujian-province-based battery maker paid an advance deposit of CNY600 million (USD94 million).

In the first half, China produced 21,320 tons of lithium hexafluorophosphate, nearly the same amount as it did in 2019 and more than double from the same period last year, according to Shanghai Xinluo Network Technology.

Editor: Kim Taylor