Chinese electric car battery manufacturer Svolt said Tuesday it will plough up to 2 billion euros into establishing a base in Germany, joining a race of Asian firms plugging into Europe's fast-growing e-mobility automotive market.

The company, a spin-off of Chinese automotive giant Great Wall Motors, said it was investing the equivalent of $2.3 billion to build two factories in the western state of Saarland by the end of 2023, creating 2,000 jobs.

Svolt announced last year that it would be looking for a European production site to strengthen its links with European car manufacturers.

The move is intended to target "the European automotive industry and the growing market for renewable energies", according to Svolt chief Yang Hongxin.

Saarland was chosen because "it is not only at the heart of Europe, but also represents a region of innovation and technology for the automotive industry," he said.

The factories will produce batteries totalling 24 Gigawatt hours (GWh) per year -- enough for 300,000 to 500,000 electric vehicles.

With demand for electric cars soaring around the world, Volkswagen alone is expected to need more than 150 GWh a year by 2025.

But few European carmakers have taken the huge financial risk of building up in-house production of lithium-ion batteries.

Rather, they prefer to farm out the battery work to specialist suppliers.

Asian manufacturers in particular have been building up capacity in Europe, with Chinese market leader CATL building a factory in Erfurt that will initially supply BMW.

Germany and France are planning an "Airbus of batteries" to take on Asian competitors, with planned investments of between five and six billion euros -- of which four billion is to come from the private sector.

fec/hmn/rl

GREAT WALL MOTOR COMPANY

VOLKSWAGEN

AIRBUS GROUP

BAYERISCHE MOTOREN WERKE AG

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