China's Great Wall-linked battery maker plans to build 20 GWh factory in Europe

A Chinese battery maker carved out of the country's biggest sport utility vehicle manufacturer, Great Wall Motor Co Ltd, on Tuesday said it is planning its first overseas manufacturing base in Europe.

SVOLT Energy Technology Co Ltd, which became independent in 2018, also said it is making "good progress" on developing a cobalt-free lithium-ion battery - a goal of battery producers aiming to eliminate the pricey and increasingly scarce mineral.

"We plan to have five production bases worldwide, including in the United States, but it will take time," said SVOLT general manager Yang Hongxin at an event in the Chinese city of Baoding. "The global plan is to reach a capacity of 100 GWh by 2025."

The move comes as Asian battery makers deepen cooperation with automakers in Europe, where limited means of making the cells that power electric vehicles has raised concern of over-reliance on Asian manufacturers.

Chinese battery maker Contemporary Amperex Technology Co Ltd (CATL) is building a 14 GWh production site in Germany and will supply batteries to local automaker BMW AG .

CATL was identified as a strategic partner by Volkswagen AG when the German automaker said it will buy 50 billion euros ($56.05 billion) worth of cells. Volkswagen also named South Korea's SK Innovation Co Ltd, LG Chem Ltd and Samsung SDI Co Ltd, as well as Sweden's Northvolt AB.

SVOLT plans to build a base in an as yet undecided European country, featuring a research centre and factories for battery materials, cells and modules with initial capacity of 20 GWh, its general manager, Yang told Reuters in an interview.

Investment will be around 2 billion euros ($2.24 billion), Yang said. As part of that, SVOLT aims to seek about 1 billion yuan ($145.34 million) in its next fundraising round this year. It will raise more funds to support construction which begins in the second half of next year, with production starting in 2022.

Production capacity will be around 24 GWh by 2025, senior SVOLT official Cao Fubiao said in the interview. The plant's first customer will likely be Great Wall Motor, and SVOLT is in talks to supply "German and French car manufacturers," Cao said, declining to identify the automakers.

Great Wall has previously said it would form a new-energy vehicle joint venture with BMW.

The European plant would add to SVOLT's first factory under construction in Changzhou, Jiangsu province. The Chinese plant will have initial capacity of 12 GWh, and will eventually exceed 70 GWh. ($1 = 0.8921 euros) ($1 = 6.8803 Chinese yuan renminbi)

(Reporting by Yilei Sun in Baoding, and Tom Daly and Norihiko Shirouzu in Beijing; Editing by Christopher Cushing)