Shanghai (ZXZC)- Chinese leading power battery maker Gotion High-Tech announced on Tuesday that its wholly-owned subsidiary Hefei Gotion High-Tech Power Energy Co.,Ltd. (Hefei Gotion High-Tech) has signed a framework agreement with Chongqing Yongchuan Great Wall Automotive parts Company Limited (Great Wall Auto Parts) to supply the latter with its power batteries.

Photo credit: Gotion High-Tech

Under the agreement, Hefei Gotion High-Tech should offer no fewer than 10GWh power batteries to Great Wall Auto Parts between 2022 and 2025. The transaction volume for the year of 2022 should be no lower than 2.5GWh.

Besides, to ensure the supply volume to Great Wall Auto Parts in 2022, Hefei Gotion High-Tech will pour a great deal of resources in the building of battery production lines, the expansion of human resources, material storage, and other businesses. Meanwhile, the buyer has agreed to support the supplier in production capacity deployment, involving both capital and technologies.

The fulfillment of the contract will have a positive effect on Gotion High-Tech's future operational performance, while the influence for 2021's business would be insignificant, said the company. The transaction would be conducive to the improvement of Gotion High-Tech's sustainable profitability and the increase of market share, and is in line with the company's long-term development strategy and the interests of all shareholders.

According to Gotion High-Tech's statement, Great Wall Auto Parts is wholly-owned by Great Wall Motor and principally engages in the sales of automotive parts. It recorded 24.51 billion yuan ($3.838 billion) in revenues and 1.016 billion yuan ($159.11 million) in net profit for the first half of 2021.