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Electric cars in China

China's CATL to supply car batteries to Nissan and Renault

Deal smooths auto makers' entry into growing Chinese electric vehicle market

CATL will make batteries for Nissan's Sylphy Zero Emission electric sedan, due out in China later this year.   © Reuters

TOKYO -- Top Chinese automotive battery maker CATL will provide lithium-ion batteries to Nissan Motor and Renault, accelerating its push to expand business with global carmakers.

CATL, or Contemporary Amperex Technology Ltd., will produce batteries for Nissan's Sylphy Zero Emission electric sedan, scheduled to hit the Chinese market in the latter half of the year. This marks the company's first deal with a Japanese automaker.

The Sylphy -- one of the 20 electrified vehicles Nissan plans to release in China over the next five years -- is slated to become Nissan's first electric vehicle mass-produced there. It is expected to offer a driving range of 338km under the Chinese measurement method.

Electric cars powered with batteries from government-designated manufacturers, which are mostly Chinese producers, will be given priority in receiving subsidies. Nissan decided to procure batteries from CATL as it seeks to balance cost and quality.

The Fujian-based producer is eager to secure more Japanese clients and plans to open a sales and development support hub in Yokohama later this month.

Renault, which is part of a three-way alliance with Nissan and Mitsubishi Motors, has also tapped CATL. The French automaker plans to use CATL batteries for the electric version of its Kangoo compact van under development. CATL already supplies such European automakers as BMW and Volkswagen and hopes to leverage the Renault deal to further solidify its foothold in Europe.

Chinese authorities approved last month CATL's plans to list on the Shenzhen Stock Exchange. The battery maker is expected to procure 13.1 billion yuan ($2.06 billion) from its initial public offering, which could come as early as summer. The funds are expected to be used to boost output capacity, launching mass production plants in the U.S. and Europe as well.

CATL aims to have battery output equivalent to 30 gigawatt-hours by the end of 2019, raising it to the equivalent of 50gwh by 2020 from 23gwh in 2017.

CATL's automotive battery business has soared since the company's 2011 founding, thanks in part to support from the Chinese government. Sales jumped 34% to 19.9 billion yuan for the year ended December, while net profit grew 31% to 3.9 billion yuan. With battery shipments hitting 12gwh in 2017, CATL has grown into a world-class player rivaling Panasonic in the automotive battery business.

Chinese regulations for so-called new-energy vehicles will come into force next year, requiring automakers to produce and sell a certain volume of such vehicles as electrics and plug-in hybrids in the country. Strengthening ties with CATL will likely be essential for carmakers as competition in the world's largest auto market heats up.

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