Shanghai (ZXZC)- GAC Group announced on Aug. 25 its board of directors had approved the proposal of building a battery subsidiary dedicated to the industrialization of the group's self-owned battery business. 

The new subsidiary, dubbed Lvqingg ("Green Engine"), will be held as to 51%, 40%, and 9% by GAC AION, GAC Motor, and GAC Business, respectively. The project will involve an investment of 10.9 billion yuan ($1.59 billion).

GAC AION's SmLFP battery; photo credit: GAC AION

The Lvqing battery company will utilize GAC Group's proprietary lithium iron phosphate technology on its first product, in a bid to greatly improve the safety performance of battery pack, and lower the auto parts quantity and battery making cost through structural optimization. 

According to GAC Group's announcement, the yet-to-be-launched subsidiary will break ground on its battery manufacturing factory at the end of this year, and fulfill the construction of a 26.8GWh volume production line by 2025. The facility will mainly serve GAC AION and GAC Group’s other subsidiaries at its early phase, and will explore external businesses and market-driven operations in the future.

Meanwhile, GAC Group's board also agreed on another proposal to invest in the battery base project of Guangzhou Greater Bay Technology Co., Ltd. ("GBT"). 

GBT's new base will contain such facilities as a cell production workshop, a battery pack workshop, an R&D and testing center, a battery trial manufacturing workshop, and a battery safety laboratory. It will focus on producing cells, modules, and PACK systems for GBT’s XFC (eXtreme Fast Charging) power batteries and other advanced energy storage equipment.