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Geely is spending $4.6 billion on a battery plant as its electric car ambitions grow




The company will invest 30 billion yuan ($ 4.6 billion) in a battery factory in Ganzhou, a city in eastern China, according to a statement released Sunday by the local government. The plant will have a capacity of 42 gigawatt-hours per year, according to the statement. This has a scale similar to that of German factories Volkswagen (VLKAF) he said Monday it would be built in Europe.

Geely confirmed in a statement on her WeChat account that she signed the deal over the weekend. He added that he had already been working with Farasis Energy, a local battery company.

Demand for batteries is expected to skyrocket in China, as the country’s electric car sales are expected to reach six million units by 2025, according to S&P Global Platts calculations.

Vehicle manufacturers around the world are charging ahead for plans to develop electric vehicles as they come under increasing pressure from regulators to deal with the climate crisis. In China, the government has aggressively pushed for new energy vehicles to deal with its own pollution problems and competition between domestic and foreign brands has been increasingly intense over the past year.

The race has resulted in strange bedfellows in China. Geely’s factory plans come two months after announcing it would partner with Chinese search engine giant Baidu to make smart electric cars. At the time of the announcement, Geely said it planned to transform from an automaker to a “technology company” focused on “smart electric transportation.” The company also announced major links with the Chinese social media giant Tencent (TCEHY) i apple (AAPL) Foxconn supplier in January.
While Geely has announced his wave of collaborations, Elon Musk’s Tesla (TSLA) has clashed with some highlights in China.
The US company, which was previously China’s best-selling electric car brand and has built a massive gigabyte in Shanghai, was convened in February by five Chinese regulatory agencies to answer questions about the quality of its cars. . From China BYD (BYDDF), which has the backing of Warren Buffett, dismissed Tesla as the best-selling electric car brand in the country earlier this year.