The two companies have agreed to invest not more than CNY 8 billion in creating a new company and manufacturing base in southwest China.
Engine of an EV. Image credit: Macau Photo Agency/unsplash
A subsidiary has been set up to produce and sell power batteries to supply the growing NEV (new energy vehicle) industry. 51% of the company will be held by Tesla supplier and lithium-ion battery manufacturer CATL, and 49% by Zhejiang Jirun, whose chairman is An Conghui, President and GEO of Geely Auto Group.
CATL stated in the announcement that the new energy vehicle market has a bright future. In order to further meet customer needs, promote business development and consolidate the market position, this subsidiary, the CATL-Geely Power Battery Co., Ltd. intends to invest in the construction of power batteries in the Economic and Technological Development Zone of Yibin City in Sichuan Province. Its total investment will not exceed CNY 8 billion, and the construction period of the project is to last no more than 26 months, covering an area of about 500 acres.
It was reported that CATL has sought to raise up to CNY 20 billion by making a non-public issuance of securities towards no more than 35 specific investors. After deducting the issuance expenditure, the money collected will be used to expand CATL's Huxi lithium-ion battery base, develop the lithium-ion battery R&D and production project operated by Jiangsu CATL, construct the power battery facilities for Sichuan CATL and supplement working capital, etc.