Beijing (ZXZC)- Avatr Technology (Chongqing) Co., LTD, plans to increase investment with 6 new investors, including China’s battery giant CATL, Chongqing Changan Auto Company, Avatr’s parent company, said in a statement.

Photo credit: Changan Auto

Avatr was established as Changan NIO, a joint venture between Changan and NIO, in 2018. In May this year, its name was changed to Avatr and started its independent operation. Its business scope covers development of automotive parts, sales of vehicles, including new energy vehicles.

Specifically, Changan will add RMB500 million investment in the company while CATL will invest RMB769.6 million. All investment will be in cash. After the investment increase, the registered capital of Avatr will be raised from RMB288 million to RMB1.17 billion.

When the deal completed, Changan’s stake in Avatr will be reduced from 95.38% to 39.02% while NIO’s will be diluted to 1.13%. CATL will have a 23.99% stake in the company and Chongqing Chengan, a private equity investment fund, has 19.01% stake. The rest 16.85% stake was held by the other four new investors. The deal is subject to the approval of China’s Anti-Monopoly Bureau of the State Administration for Market Regulation (SAMR).

In the statement, Changan said that it does not increase corresponding investment to maintain its stake, because it will become much more difficult to develop new energy vehicle business by itself as the segment’s competition gets increasingly fierce. Outside investment will help to improve the management efficiency and integrate resources across the value chain.