BMW Brilliance, a joint venture between BMW and Brilliance Auto, signed a strategic cooperation agreement with China’s Contemporary Amperex Technology Co. Limited (CATL) on July 17 in Beijing.
Under the agreement, BMW Brilliance will purchase a battery capacity construction project from CATL for an amount of 815 million yuan ($121.4 million) for the use of EV battery cell productions.
The two companies also signed a long-term procurement agreement, according to which, CATL will supply to BMW Brilliance specific battery products in the future for an advance payment of 2.9 billion yuan, about 1.6 percent of CATL’s market capitalization based on its recent share price.
Founded in 2011, CATL is currently the world’s largest producer of EV battery cells. The Chinese tech company specializes in manufacturing lithium-ion batteries for EV, energy storage systems, and battery management systems. It became a publicly listed company on the Shenzhen Stock Exchange last month.
CATL already supplies all of the battery cells used in the EVs produced by BMW Brillance. The new cooperation will enable BMW Brilliance to solidify its “In China, For China” new energy ecosystem and brings it the possibility to acquire an equity stake in the Chinese battery maker if CATL sells shares in China or abroad in the future.
CATL signed an agreement to build its first European EV battery factory in Germany on July 9; the agreement also includes a major contract to supply lithium-ion batteries to BMW. These took place during Chinese Premier Li Keqiang’s visit to Germany, and the signing ceremony was also attended by German Chancellor Angela Merkel.