HELSINKI -- Chinese battery maker Contemporary Amperex Technology Limited (CATL) has bought a 22 percent stake in Finnish contract manufacturer Valmet Automotive to expand in the European electric car market.
CATL said it would partner with Valmet to supply European carmakers with battery packs and drivetrain solutions for electric cars.
"Our shared aim is to develop a strong position in the European electrical vehicles market," CATL Chief Operating Officer Jia Zhou said in a statement on Monday.
CATL plans to build a factory in Europe. The company tripled its production capacity for lithium-ion car batteries last year and plans to grow its battery capacity six fold by 2020 to 50 gigawatt hours, which could put it ahead of Tesla Motor's Gigafactory in Nevada.
Valmet Automotive Chairman Jarkko Sairanen said in a statement that CATL will bring new resources and capabilities into the company as the electrical vehicle market undergoes a fundamental transformation with significant growth expectations.
CATL bought the Valmet stake for an undisclosed sum via a new share issue. Valmet's other owners are private equity firm Pontos and state-owned Finnish Industry Investment, which both have 39 percent stakes.
Valmet ended production of the Mercedes-Benz A class at the end of last year and will begin output of the Mercedes GLC SUV this year. The manufacturer has previously built cars for Saab, Opel, Porsche, Fisker and Think.
In August, Ulrich Hackenberg, Audi's former r&d chief, joined Valmet's board of directors. Hackenberg, who left Volkswagen Group in 2015, is involved in managing the manufacturer's relationship with Mercedes.
Automotive News Europe contributed to this report