Chinese battery giant Contemporary Amperex Technology (CATL) is selling its entire 20.6% stake in Finnish contract car maker Valmet Automotive to the Finnish state and another existing shareholder, the government announced on Monday. The move comes amid a challenging market situation for the European electric vehicle industry, characterized by slower-than-expected electrification and low sales that have caused Valmet’s order volumes to decrease in recent years. The Finnish state, which already owned a 44.96% stake, did not disclose the financial terms of CATL’s exit.
Following the transaction and an additional capital injection of €35 million, the Finnish state’s ownership in Valmet Automotive will increase to 79%. The remaining 21% will be held by the private investor group Pontos, another existing shareholder. Valmet Automotive, which has previously manufactured vehicles for brands like Porsche, Mercedes-Benz, and Saab, is now pivoting its strategy to navigate the industry downturn.
As part of its new direction, the company is expanding its operations into new industrial sectors, including contract manufacturing for the defence industry. In a related transaction, the state, Pontos, and pension insurer Varma are also purchasing Valmet Automotive’s shares in its subsidiary, battery maker Ioncor. This will give the Finnish state a 70% stake in Ioncor through its investment company Finnish Minerals Group.
The Finnish government stated that a total of €120 million in state capital will be used for these financing arrangements. The deal highlights the pressures facing the European auto sector, where an influx of cheaper, tech-savvy Chinese EVs has challenged traditional manufacturers. In response, the EU imposed tariffs on China-made EVs in 2024, and industry lobbyists have urged governments to bolster domestic players to help level the playing field during the current slowdown.
