China’s leading electric vehicle (EV) battery manufacturer, Contemporary Amperex Technology Co Ltd (CATL), revealed plans to invest CNY39bn (US$5.9bn) to build three plants in the country to meet growing demand, according to local reports.

The largest lithium-ion battery plant will be built in Ningde, Fujian province, with an investment of CNY17bn. A further CNY12bn will be invested in a plant in Liyang, Jiangsu province, while the remaining CNY10bn will go into expanding capacity at its existing EV battery site in Yibin in Sichuan province.

In a regulatory filing this week, the company said “”in line with the company’s strategic development plan, the investment will further improve our production capacity to meet future business development and market expansion needs. It will also bolster the company’s long-term, stable development”. 

Local industry analysts expect, with the investment, the company will have an additional 120-150 GWh battery production capacity within the next few years. The company is looking to expand its share of global EV battery sales to 40% with this new investment, with China expected to remain the largest single market for these vehicles.

The government wants new energy vehicle sales to account for 20% of new vehicle sales by 2025, comprising mostly battery-powered electric vehicles. The additional battery production capacity will also help reduce the cost of these vehicles, which will help drive demand further.