Svolt Energy and BASF Shanshan will each take a 10 percent stake in Yongshan Lithium.

(Image credit: Svolt Energy)

Great Wall Motor-backed power battery supplier Svolt Energy and BASF Shanshan Battery Materials, a joint venture between German chemical giant BASF and Chinese cathode materials producer Shanshan, have invested in a Chinese lithium producer.

Svolt Energy and BASF Shanshan signed a deal with Hunan Yongshan Lithium on March 30 to each take a 10 percent stake in Yongshan, according to a statement released by Svolt Energy on Wednesday.

The three parties will enter into a strategic partnership in industrial capital, lithium product supply and lithium resources, according to the statement.

Svolt Energy also signed a strategic cooperation framework agreement with Yongshan, and the series of arrangements will secure Svolt Energy's lithium supply, the statement said.

With the rapid growth of the electric vehicle industry, the prices of raw materials, including lithium and nickel, have risen significantly in recent years. For battery suppliers, including Svolt Energy, successfully locking in raw material supplies is key to staying competitive.

At the end of December last year, Svolt Energy said it was aiming to get battery capacity to 600 GWh by 2025, almost double its previous target of 320 GWh.

"In the face of the new cycle, Chinese companies must continue to stay ahead of the curve, with continuous innovation in technology and rapid ramp-up in production capacity," said Yang Hongxin, chairman and CEO of Svolt Energy.

Svolt Energy focuses on cobalt-free battery and solid-state battery research and development, and has established R&D centers in Japan, South Korea, the United States, India, Wuxi, Baoding and Shanghai.

Svolt Energy begins construction of new $1.57 billion battery plant