(Yicai Global) Sept. 16 – Dongfeng Motor, one of China’s vehicle-making giants, is expected to make a CNY12 billion (USD1.7 billion) JV investment to build a power battery plant along with its partner, according to an announcement by partner Sunwoda Electronic late yesterday.

The proposed plant is designed to have an annual capacity of 30 gigawatt-hours in the city of Yichang, Hubei province, near the Three Gorges Dams, the world’s largest hydropower project, the Shenzhen-based battery maker announced.

The JV plant will be built in two phases. The first one is designed to have an annual capacity of 20 GWh with an investment of about CNY8 billion (USD1.1 billion), and the second one will have an output of 10 GWh per year with a cost of around CNY4 billion. The construction schedule was not released. 

Sunwoda’s automobile battery subsidiary Sunwoda Electric Vehicle Battery will pen an investment agreement with Dongfeng and its majority-owned units as well as the Yichang municipal government, according to yesterday’s statement.

The two sides first announced the JV battery plant plan back in June, they agreed to form a JV with Sunwoda holding a 51 percent stake, while Dongfeng and its auto parts subsidiary together holding a 49 percent stake, to build and run the new battery plant. At that time, the location, capacity and investment amount were all undecided yet.

As China’s automobile industry is moving fast toward a transition to electric vehicles, many Chinese traditional automakers have unveiled their respective plans to set up power battery JVs this year to guarantee battery supply and cut costs. 

Sunwoda’s shares [SHE:300207] closed down 1.61 percent at CNY24.39  (USD3.52) ， after gained near 2 percent early in the day. The Shenzhen marker’s Nasdaq-style ChiNext board indesx, where Sunwoda’s shares are traded, was down 2.34 percent as worry about economic slowdown dominated today’s market.

Editor: Futura Costaglione