(Bloomberg) -- Chinese carmaker Zhejiang Geely Holding Group Co. is doubling down on electric vehicles, outlaying almost $5 billion to build a new battery plant in the nation’s south.
Geely unit Geely Technology Group Co. said on Monday it had signed an agreement with local authorities to invest 30 billion yuan ($4.6 billion) to construct a factory in the city of Ganzhou in Jiangxi province, according to a statement on the company’s official Wechat account. The plant will have an annual capacity of 42 gigawatt-hours.
Carmakers and battery producers are increasing their investments in the component that accounts for around 30% of an EV’s total cost. With annual sales of new energy vehicles in China expected to more than quadruple to 6 million units by 2025, demand for batteries is expected to soar.
Read more: Why Building an Electric Car Is So Expensive, For Now: QuickTake
Over the past few months, Geely has been pushing further into EVs, forging major collaboration pacts with companies from search-engine heavyweight Baidu Inc. to Apple Inc.’s Taiwanese manufacturing partner Foxconn Technology Group and Tencent Holdings Ltd.
Geely, which is China’s No. 1 maker of local branded cars, sold 68,142 new energy vehicles last year, about 5% of total deliveries.
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