(Yicai Global) Feb. 28 -- Chinese state-owned automaker FAW Group and Contemporary Amperex Technology, the nation's largest electric car battery maker, have joined hands to produce power units. 

The pair has set up a joint venture dubbed CATL-FAW Power Battery Company, with an initial investment of CNY2 billion (USD300 million), according to Qixinbao, a corporate information platform. CATL holds a 51 percent stake in the JV along with a CNY1.02 billion investment, while the remainder belongs to FAW. 

The Fujian province-based JV will develop, manufacture and sell lithium-ion batteries made for new energy vehicles, as well as energy storage batteries with ultra-large capacity. It will also provide consulting and after-sales services.

For FAW, the tie-up may ensure a stable stream of power unit supplies at a competitive price. The union works for CATL by increasing its chances in terms of standing up against Japanese and South Korean rivals such as Panasonic, LG Electronics and Samsung Electronics.

CATL has established partnerships with many Chinese carmakers, including Geely Automobile Holdings, SAIC Motor, GAC Group, BAIC Motor, and Dongfeng Motor.

CATL's stock price [SHE: 300750] rose 3.03 percent to CNY88.66 (USD13.3) by 10.47 a.m. 

Editor: Emmi Laine