TOKYO -- BMW is the first overseas automaker to get a potential toehold in Chinese electric-car battery maker Contemporary Amperex Technology Co. Ltd. (CATL), obtaining the right to make an equity investment of as much as 2.85 billion yuan ($427 million).
BMW Brilliance, the German carmaker’s Chinese joint venture, is entitled to invest in CATL if the company plans to sell shares in China or abroad, according to a statement from the battery maker Tuesday. At CATL’s current stock price, the right would give BMW a stake of less than 2 percent of the company.
BMW is studying the option as it forges close ties with the battery producer, a company spokesman said.
With the demand for electric vehicles projected to surge, competition among carmakers to cooperate with battery suppliers is heating up.
CATL, which said it shipped more batteries last year than any competitor, struck joint ventures or received minority equity investments from Chinese automakers including Dongfeng Motor Group, SAIC Motor and Chongqing Changan Automobile before its initial public offering last month.
BMW Brilliance will also prepay 2.85 billion yuan as part of a long-term contract to buy batteries from CATL. It’s also purchasing a 815 million yuan battery-production project from the supplier to make designated products, according to the statement.
BMW said this month it will source about 4 billion euros ($4.7 billion) worth of battery cells from CATL, providing a building block for the Chinese producer’s plan to establish a manufacturing site in Germany.
Last week, CATL said it would build its first production site in Europe in Germany.