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Foxconn infuses NT$4.4B into electric vehicle battery company CATL

Foxconn to invest NT$4.4 billion in Chinese electric vehicle battery supplier Contemporary Amperex Technology

Telsa electric vehicle displayed in Kansas City in U.S.

Telsa electric vehicle displayed in Kansas City in U.S. (CNA photo)

TAIPEI (Taiwan News)—Apple assembler Foxconn announced it will be investing NT$4.4 billion (US$1.4 billion) in the Chinese electric vehicle battery manufacturer Contemporary Amperex Technology (CATL).

The investment will give Foxconn a 1.19 percent stake in CATL or 7.66 million shares. Foxconn’s investment in CATL will be a long term investment, stated the company.

Founded six years ago, CATL (宁德时代新能源科技股), a subsidiary of lithium ion battery manufacturer Amperex Technology Limited, overtook LG Chem in battery output in 2016, and is close on the heels of Panasonic and Warren Buffet-backed BYD, according to a Reuters reports.

The company’s estimated market value is currently at RMB 84 billion (US$12.19 billion), reported CNA.

CATL aims to grow its battery capacity sixfold by 2020 to 50 gigawatt hours, putting it ahead of Telsa Motor’s Gigafactory in Nevada, U.S.

Some of CATL’s electric car battery clients include German luxury car brand BMW, Chinese car brands Yutong (,Xiamen King Long United Automotive (金龍), and BAIC Motor Corporation (北京汽車).

CATL’s product portfolio is comprised of electric car batteries, high-end consumer electronic product batteries, and high voltage batteries.

Hong Kong-based Amperex Technology Limited (ATL), the parent company of CATL’s major consumer electronic product clients include Apple, TDK, Amazon, HTC, Lenovo, Huawei (華微), Coolpad (酷派), and others.

In addition to its recent investment in CATL, Foxconn has increased its investments in self-driving electric vehicles in recent years, signing a strategic partnership framework agreement with China Harmony Auto (中國和諧汽車) and Tencent (騰訊) to launch a joint venture in Zhengzhou City of Henan Province in China to develop connected smart electric vehicles in March 2016.

Foxconn is currently China Harmony Auto’s second largest shareholder.

A Chinese-language UDN report noted two Foxconn subsidiaries are key suppliers of Telsa electronic vehicle components, and speculated the company will play an important role in Apple’s electric car developments.

Market insiders estimated Foxconn module business Eson Precision Ind. (乙盛-KY) and automotive equipment cable business BizLink Holding Inc. (BHI) (貿聯-KY) will become Apple’s important electric car strategic partners.

Both subsidiaries have an important market position in the electric vehicle market, and are key Telsa’s electronic car suppliers.

Telsa is BizLink’s fifth largest client, and contributes to 10 percent of BizLink’s revenues.

BizLink Chairman Liang Hwa-Tse (梁華哲) revealed in an earlier interview with UDN that the company signed a new partnership deal with Apple, but declined to provide further details.

Eson Precision is also a supplier of battery components, sunroofs and car floor components for Tesla. The company intends to raise its automotive product portfolio from the current 5 percent to 10 percent by 2018.

Foxconn’s track record in electric automobile components led many analysts to believe Apple might decide to partner up with the company, following rumors the Cupertino-based company intends to acquire two-wheeled electric automotive company Lit Motors.