Lithium Werks, a Dutch battery company, will invest €1.6bn to build a factory in China, in a deal signed during Premier Li Keqiang’s visit to the Netherlands on Tuesday.
Lithium Werks, which was founded this year by Kees Koolen, former chief executive of Booking.com, said the 60 hectare factory will produce 8 gigawatt-hours of batteries a year, enough to power hundreds of thousands of vehicles.
The agreement is the latest sign of China’s efforts to open its domestic battery market to foreign investment. Foreign battery companies have struggled to expand in China over the past few years due to rules that encouraged local car companies to use Chinese-made batteries.
“It’s a national strategy to make that a big industry,” Mr Koolen said. “There’s a lot of companies in Europe and outside who need battery cells.”
Lithium Werks will build the factory in the Yangtze River delta with Zhejiang Jiashan Economic and Technological Development Zone Industry Corp, a local state-owned company.
The financing will be raised through a sale of up to 30 per cent equity in Lithium Werks to investors and the rest through project finance with Chinese banks.
Mr Koolen has ambitious plans to build ten battery factories around the world. He is targeting batteries for use in industrial applications such as forklift trucks, ships, delivery trucks, and for storage of renewable energy.
The company is targeting $1bn of revenue by 2020, he said. “The world is going through a transition from fossil fuels to renewable energy and the only way to make the transition is to store energy,” he said.
“It’s going to be a challenge for humanity to make enough batteries.”