BMW has given a contract worth just more than a billion euros ($1.16 billion) to China’s lithium battery maker Contemporary Amperex Technology Ltd, the German automaker stated on Thursday.
The deal will permit China’s biggest lithium battery maker to construct a factory to produce cells for electric vehicles in Europe, BMW spokesman Glenn Schmidt stated.
CATL is banking on a state-led Chinese drive to fight pollution from conventional combustion engines and boost the country’s presence in the foreign new energy vehicle (NEV) market.
CATL is scouting possible locations for a battery production facility in Europe with the German state of Thuringia encouraging the Chinese manufacturer to utilize a site close to Erfurt, in eastern Germany.
Earlier month, Daimler placed an order with CATL to purchase electric vehicle battery cells.
CATL did not respond to requests for comment on Friday.
CATL made its debut on the Shenzhen stock exchange previously this month and intends to use the proceeds to finance its 24 gigawatt-hour (GWh) capacity expansion.
Based in Fujian province, it sold 11.85 GWh of lithium batteries in 2017, the highest in the world. It also intends to expand into downstream vehicle production and was listed as a “sizeable investor” in a $500 million fundraising for Chinese NEV start-up Byton.
China’s biggest NEV producer, BYD Co Ltd, earlier week announced the introduction of what will become the world’s biggest lithium battery plant, and intends to raise its own battery production to 60 GWh annually by 2020.