Electric vehicle battery supplier China Aviation Lithium Battery Technology (CALB) will invest RMB 24.8 billion ($3.8 billion) to build a 50 GWh capacity battery production base in Hefei, central China.

The company signed an investment cooperation agreement with the Hefei city government on Tuesday for the project, which will be located in Xiatang Town, Changfeng County, according to an announcement.

(Photo source: CALB)

The batteries produced at the base will be power batteries as well as batteries for energy storage, according to the announcement.

The two sides will promote the first phase of the base project to start as soon as possible and drive more related projects to settle, helping Hefei to build an intelligent electric vehicle capital with international influence, the announcement said.

It is worth mentioning that last month, and Hefei signed an agreement that the "relevant project" between the two will start construction at the end of August.

There are no more details about the BYD project, but predictions suggest that it is a production line for BYD's buses and new energy vehicles, to be built in Xiantang town, with an investment of up to RMB 20 billion.

Currently, Hefei has brought together more than 120 new energy vehicle companies and formed a complete industrial chain.

CALB was established in 2015, it is mainly engaged in the R&D, production and sales of new energy batteries and power supply systems, its shareholders include GAC Capital, Sequoia Capital, , according to data provider Qichacha.

The company's customers include , Changan, SAIC-GM-Wuling, GAC Toyota, Honda, .

CALB is one of the battery suppliers for the Wuling Hongguang Mini EV, a model that has set several sales records in China.

But the company is currently facing a patent lawsuit from , China's largest power battery manufacturer.

On July 21, CATL announced that it has formally sued CALB for patent infringement, claiming that CALB's allegedly infringing batteries are in tens of thousands of vehicles.

If CALB loses the lawsuit, it may be required to ban its entire product line.

CATL is the largest power battery supplier in China, with 25.76 GWh installed in China from January to June and a market share of 49.1 percent, according to the China Automotive Battery Innovation Alliance (CABIA).

CALB ranked fourth with 3.63 GWh of power battery installed in China in the same period, with a market share of 6.9 percent.

The real reason behind EV battery giant CATL's lawsuit against CALB