EVE Energy to issue 5-billion-yuan convertible bonds to expand cylindrical LFP battery production

Shanghai (Gasgoo)- On March 20, EVE Energy Co., Ltd. announced plans to issue RMB 5 billion in convertible bonds to unspecified investors.

The proceeds will fund the company's 23GWh cylindrical lithium iron phosphate (LFP) battery project, primarily targeting passenger vehicles and residential energy storage applications. Upon completion, the project is expected to add approximately 21GWh of 46-series large cylindrical battery capacity.

According to EVE Energy, as of the end of September 2024, its cylindrical LFP battery products had accumulated intentional demand of approximately 81GWh over the next five years. Meanwhile, its ternary large cylindrical batteries had secured future demand of approximately 483GWh over the same period.

The company attributes its capacity expansion plans to the production requirements of downstream customers. It noted that intentional demand generally falls into two categories: non-written agreements, which arise during business negotiations, and formal agreements, which include signed cooperation contracts, supplier nomination letters, project documents, requests for quotations, etc.

EVE Energy's expectations for the absorption of new production capacity are based on several key assumptions:

● Continued robust growth in the new energy vehicle (NEV) market with no major adverse factors affecting the industry.

● Stable sales performance of customers' end products, ensuring that both written and non-written demand projections remain intact.

● Downstream customers meeting their own sales forecasts, aligning with EVE Energy's internal assessments of demand.

● Successful acquisition of supplier nomination letters from certain customers who have not yet issued them, enabling the company to proceed with product development and mass production as planned.

● Sustained market share among key customers, ensuring no significant drop in supply volume.

Among the 81GWh of intentional demand for cylindrical LFP batteries, 31GWh is based on written commitments, while 50GWh is from non-written agreements. For ternary large cylindrical batteries, 341GWh of demand is documented in formal agreements, including 187GWh from customers already in mass production or supplier nomination stages, while 142GWh remains informal.