TMTPost -- Contemporary Amperex Technology Co. Ltd. (CATL), the top battery manufacturer for lectric vehicles (EVs) in the world, is seeking more financial firepower to fund its supply chain amid efforts for overseas expansion.

Credit：CATL

CATL is in talks with global investors to launch a US$1.5 billion fund to finance its plan to create a worldwide supply chain, the Financial Times reported Friday, citing a person with knowledge of the plans. Bloomberg’s sources then echoed that the battery giant may raise US$1.5 billion for a fund, a move targeting expansion of CATL’s supply chain in Europe and other foreign markets.

CATL later Friday confirmed it is working to tap mostly global investors for a supply chain fund. "The purpose of the fund is to facilitate global energy transition, with the support of like-minded partners from all over the world," CATL said in a statement to the South China Morning Post, without divulging the amount it is raising. "The fund [aims] to raise capital mainly overseas, and has been in discussions with a number of potential investors."

CATL didn’t provider further details. Hong Kong-based Lochpine Capital, a unit formerly known as CATL Capital that was founded in August 2023, will reportedly manage the US$1.5 billion fund. CATL may raise funds from several sovereign wealth funds, the families behind global marques, oil and gas refiners, its key customers and other manufacturers, such as Mercedes-Benz Group AG and Porsche Ventures, according to the Financial Times. Porsche Ventures is an investment unit of the namesake German maker of luxury cars, which launched its first renminbi-denominated fund with China International Capital Corp to invest in Chinese EVs and companies involved in smart mobility.

The fundraising highlighted CATL’s ambition to expand its worldwide footprint. The Chinese battery maker announced in August 2022 that will invest 7.34 billion euros to build a 100 GWh battery plant in Debrecen of east Hungary, which is also its second battery plant in Europe following its German plant. Mercedes-Benz Group AG is joining in establishing the plant, which is located in close proximity to CATL customers like Mercedes-Benz, BMW AG, Stellantis NV and Volkswagen AG.

CATL also reached a deal with Ford Motor Co. to supply the US automaker.Ford said in February 2023 that it will invest US$3.5 billion to build a lithium iron phosphate cells (LFP) factory in Michigan. This is the largest investment for a U.S. automaker to tap into the cheaper battery cell chemistry as LFP costs less than the nickel-and-cobalt combination widely used in North America and Europe. The factory, located in Marshall, a town about 100 miles west of Detroit, is expected to create about 2,500 jobs and open in 2026, with annual battery capacity to empower 400,000 EVs.

Calling the plant a wholly-owned subsidiary, Ford said CATL will serve as its partner that provides technology and expertise. Ford executives said all the operations of the plant will be under control of the company and CALT employees will be stationed there. CATL confirmed it has accepted invitation for cooperation from Ford. The Chinese EV battery giant would license CTP (cell to pack) technology to Ford and its workers shall help the new plant from construction to operation.

Ford was reported last September that it halted construction of its plant in Marshall, Michigan as several House committees launched investigations into CATL and Ford’s cooperation and the project, arguing it would enable Chinese domination of the U.S. auto industry. A Ford spokesperson later confirmed the U.S. auto giant paused work and limited spending on construction on the Marshall project “until we’re confident about our ability to competitively operate the plant”. Ford was reported in April that the plan in Michigan was still under construction but Ford cut the planned investment to at least US$1 billion as the company shifted its strategies to hold onto its market share in the roiling EV market.