Volkswagen Group China becomes largest shareholder of China’s No.3 battery maker

Shanghai (Gasgoo)- Volkswagen Group China is about to acquire a 26.47% stake in Gotion High-Tech, China's No.3 battery maker, becoming the latter's biggest shareholder, according to an announcement released by Gotion High-Tech on May 28.

The Chinese battery manufacturer said it plans to raise money by making a non-public issuance of stocks towards Volkswagen Group China. Upon the completion of the stock transfer, the German automaker will hold 440,802,578 shares in Gotion High-Tech, valued at €1.1 billion. The second biggest shareholder will be Gotion High-Tech' chairman Li Zhen and his persons acting in concert, who account for 18.2% share. Besides, Mr. Li will still serve as the actual controller of the Hefei-based company.

(Photo source: Gotion High-Tech's WeChat account)

The transaction will make Volkswagen Group the first foreign automaker that directly invests in Chinese battery manufacturing, and is expected for completion at the end of 2020.

The money raised will be used to construct a high-specific-energy power lithium battery facility with an annual capacity of 16GWh, build a manufacturing base that is able to output 30,000-ton high-nickel ternary cathode material per year, and supplement working capital.

The capital injection from Volkswagen will not affect Gotion High-Tech's existing and future development projects, which cover the complete battery manufacturing value chain from the raw material to product recycling, said Gotion High-Tech.

The battery maker also revealed that it will become an authorized supplier to the German auto giant, and has a chance to offer batteries to the all-electric vehicles Volkswagen deploys in China.

The Wolfsburg-based automaker strives to meet a target of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars, which accordingly needs 75GWh of battery supply.

As a major Chinese battery provider only followed by CATL and BYD, Gotion High-Tech presently possesses a combined battery capacity of 10GWh per year at factories in cities like Qingdao, Hefei, Tangshan and Nanjing. It is ambitious to raise the total capacity to 30GWh by 2020 and to 50GWh by 2022.