Chinese automaker Zhejiang Geely Holding Group Co. is doubling down on electric vehicles, spending almost $5 billion to build a new battery plant in the nation’s south.
Geely unit Geely Technology Group Co. said Monday it had signed an agreement with local authorities to invest 30 billion yuan ($4.6 billion) to construct a factory in the city of Ganzhou in Jiangxi province, according to a statement on the company’s official Wechat account. The plant will have an annual capacity of 42 gigawatt-hours.
Automakers and battery producers are increasing their investments in the component that accounts for around 30 percent of an EV’s total cost. With annual sales of new energy vehicles in China expected to more than quadruple to 6 million units by 2025, demand for batteries is expected to soar.
Over the past few months, Geely has been pushing further into EVs, forging major collaboration pacts with companies from search-engine heavyweight Baidu Inc. to Apple Inc.’s Taiwanese manufacturing partner Foxconn Technology Group and Tencent Holdings Ltd.
Geely, which is China’s No. 1 maker of local-branded cars, sold 68,142 new energy vehicles last year, about 5 percent of total deliveries.