Chongqing Sokon, whose model has been selected by for sale in its channel, announced Friday that its subsidiary Chongqing Jinkang New Energy and power battery giant signed a five-year framework agreement on September 9 to secure the necessary production capacity.

Under the agreement, Jinkang will purchase power cells from CATL from 2022 to 2026.

To secure the procurement requirements, Jinkang is required to pay CATL a capacity deposit in accordance with the agreement to support the early deployment of capacity by both parties, according to the agreement.

Jinkang will submit a request to CATL at least 6 months in advance to jointly confirm the total amount of procurement for the following year, which will be agreed upon through an affiliation agreement.

If the affiliation agreement is not signed in the current year, the default annual amount for the following year will be 10 GWh.

During the supply period, if Jinkang does not complete the annual quota of deliveries due to its own reasons, or if the total amount of electricity supplied is less than the annual quota due to CATL's reasons, the defaulting party shall pay a certain percentage of liquidated damages to the defaulting party.

The agreement is conducive to the establishment of a long-term strategic relationship between the two parties to ensure the long-term stable supply of power batteries, Sokon's statement said.

Sokon is an integrated automotive manufacturing company that develops, manufactures, sells and services passenger cars, commercial vehicles, powertrain and other automotive components.

Sokon's existing vehicle brands include Seres, Dongfeng Fengguang, and DFSK, and its main products include SUVs, MPVs and minivans.

The company has been in the spotlight this year because Huawei announced on April 20 that it had officially started selling cars, with the Seres SF5 from it being the first model to enter its channel.

(Seres SF5. Photo source: Seres)

Pang Hai, Sokon's vice president and general manager of sales, revealed in 2020 that Seres, its brand, plans to launch no less than seven new models in succession by 2021.

Sokon sold 3,565 new energy vehicles in August, up 145.69 percent from the same month last year, according to figures released by the company earlier this month.

The company sold 19,227 vehicles in August, down 15.42 percent from a year earlier, with cumulative sales this year up 9.39 percent to 169,821 vehicles, the data showed.