Shanghai (ZXZC)- GAC Group announced that it plans to sign a joint venture operation contract with Contemporary Amperex Technology Limited (CATL) on July 19 in Guangzhou. The two companies plan to jointly invest and establish two joint ventures in Guangzhou, which will be temporarily named as GAC Amperex Power Battery System Co., Ltd. and Amperex GAC Power Battery Co., Ltd.

The construction of power battery systems and power battery projects, as well as investment scale involved in the joint venture operation contract should be deliberated and approved by the board of directors of GAC Group, but needn't to be deliberated and approved by shareholders meeting.

GAC Amperex Power Battery System Co., Ltd. will be registered with RMB 100 million, which will be raised by both parties. GAC Group, which will hold a 51% stake in the JV, will provide RMB 51 million. CATL, with a 49% stake in the JV, will fund RMB 49 million.

Amperex GAC Power Battery Co., Ltd. will be jointly funded by both parties with registered capital of RMB 1 billion. GAC Group will invest RMB 490 million to hold a 49% stake in the JV, while CATL will hold the rest stake with RMB 510 million investments.

The announcement states that the establishment of the two JVs is beneficial to deepen the cooperation between GAC and CATL, help GAC secure the stable supply of major NEV parts, lower the procurement cost of major parts, thus help boost the development of the automaker's NEVs and strengthen the overall competitiveness of the automaker's products.