Volkswagen to acquire stake in Chinese battery maker

Hong Kong/Beijing — Volkswagen is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech, two sources told Reuters, as the German firm accelerates its electric push into the world’s largest vehicle market.

The deal’s details have been mostly finalised and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.

A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain. “By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, MD of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”

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