China’s Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery maker, is in discussions with overseas sovereign wealth funds and private offices of wealthy individuals to raise a $1.5 billion fund.
This fund aims to bolster CATL’s global supply chain expansion efforts, particularly in Europe and other foreign markets where it supplies batteries to Tesla, Volkswagen, and Ford.
CATL, based in Fujian, faces challenges under China’s stringent overseas investment rules, despite holding Rmb289 billion ($40 billion) in cash reserves as of March 31.
These rules necessitate government approval for significant overseas investments, a process known for its complexity and duration.
The fund, which CATL plans to contribute approximately 15% to alongside global investors, will focus on supporting companies capable of supplying CATL’s operations in Europe.
According to sources close to the fund, this initiative aims to address supply gaps and ensure robust investment returns.
Hong Kong-based Lochpine Capital, formerly known as CATL Capital, will manage the $1.5 billion fund. CATL has approached entities like Mercedes-Benz and other automaker families for potential investments, while also engaging with sovereign wealth funds, family offices, oil and gas companies, and European manufacturers.
CATL emphasized that the fund’s objective is to facilitate the global energy transition with contributions from international partners, primarily targeting overseas investors.
This move comes as CATL expands its footprint in Europe amidst geopolitical tensions that challenge its growth strategies in North America.
