(Yicai Global) July 13 -- Contemporary Amperex Technology's equity price jumped after Japan’s Honda Motor said that it will subscribe to the Chinese battery behemoth's new shares to ensure supply.

CATL's stock price [SHE: 300750] climbed 5.4 percent to CNY215 (USD30.70) this morning. Meanwhile, the Tokyo-based company's shares [TYO: 7267] rose 6.1 percent to JPY2,798 (USD26.20).

The Japanese carmaker will purchase a 1 percent stake in the Chinese electric vehicle battery maker, the Ningde-headquartered firm said in a statement on July 10, without disclosing the price. But based on the available stock data, Honda is estimated to purchase more than 24 million shares, spending as much as CNY5 billion (USD713.9 million).

In late June, China's securities regulator approved CATL's issuance of no more than 221 million new shares to expand its production. It attempts to raise no more than CNY19.7 billion (USD2.8 billion).

CATL and Honda have joined hands before. The Chinese firm penned an agreement in February 2019 with Honda to supply the latter with 56 gigawatt-hours of lithium-ion batteries by 2027.

Besides battery procurement, the pair will team on developing new power unit technologies, according to the latest statement. They will also explore recycling some used batteries.

The deal will help CATL consolidate its partnership with the Japanese carmaker and improve its profitability, it added.

Lately, foreign auto firms have increasingly been seizing opportunities in Chinese battery makers. Germany's Volkswagen said in late May that it will invest about EUR1.1 billion (USD1.2 billion) to buy a majority stake in Guoxuan Hi-Tech. Early this month, Daimler said it will buy a 3 percent stake in Farasis Energy.

Editor: Emmi Laine