Volkswagen's electric vehicle ambitions include acquiring 20% ​​stake in battery maker Guoxuan High-tech

Sources revealed that Volkswagen plans to acquire a 20% stake in Chinese electric vehicle battery manufacturer Guoxuan High-tech Co., Ltd. (hereinafter referred to as "Guoxuan High-tech") through a discounted private equity placement in the coming weeks.

Currently, Guoxuan High-tech's market value is US$2.8 billion, and the 20% stake in the company that Volkswagen plans to acquire is worth approximately US$560 million.

After acquiring 20% ​​of the shares, Volkswagen will become the second largest shareholder of Guoxuan High-tech, second only to Zhuhai Guoxuan Trading Co., Ltd. (holding 25%), which is owned by Guoxuan High-tech founder Li Zhen.

In August last year, people familiar with the matter said that Volkswagen was exploring investments in Chinese auto parts suppliers to better compete in the Chinese market. At the time, foreign media said that the company had been studying several potential targets, including Guoxuan High-tech.

With the launch of Volkswagen's first pure electric car ID.3, Volkswagen will accelerate its electrification pace. Previously, Volkswagen said it expects to achieve 1 million electric vehicles by the end of 2023 and 1.5 million electric vehicles by 2025. In addition, Volkswagen plans to invest 33 billion euros in the development of electric technology and charging infrastructure in the next few years.

It is reported that Guoxuan High-tech was founded in 1995. The company's main businesses include new energy power batteries and power transmission and distribution equipment. Among them, Hefei Guoxuan focuses on new energy power battery business, and Dongyuan Electric focuses on power transmission and distribution equipment business. The company's main products include power battery systems and power transmission and distribution equipment. The power battery system includes power lithium battery positive electrode materials, single lithium-ion batteries (cells), power lithium-ion battery modules, battery management system BMS and battery packs.

Guoxuan High-tech is one of China's many medium-sized battery manufacturers, second only to CATL and BYD, and is headquartered in the eastern Chinese city of Hefei. At present, Guoxuan High-tech's lithium iron phosphate battery energy density has made a major breakthrough, with the single cell increasing from 170Wh/kg to 190Wh/kg, and the battery pack reaching 140Wh/kg. The range of the finished battery has reached more than 400 kilometers.

Sources have said Volkswagen has long wanted to take control of a battery maker to better manage its supply chain.

Volkswagen declined to comment on the report. Gaoxuan High-Tech and the China Securities Regulatory Commission did not immediately respond to requests for comment.