The Finnish Gouverment, said in a statement, said that the stake sale came with the purpose of “a challenging market situation" due to the "slower-than-predicted pace of electrification".
Adding that “The downturn in the European automobile industry has caused Valmet Automotive's order volumes to decrease in recent years”. CATL bought Valmet Automotive in 2017.
The Chinese Electric Vehicle makers, often backed by generous state support, have for years challenged traditional European and US carmakers with cheaper, tech-savvy models.
More so, after CATL stake sale and capital injection happened, the Finnish state will own 79% stake in Valmet Automotive.
“In line with its strategy, Valmet Automotive is expanding its operations to new industrial sectors such as contract manufacturing for the defence industry” the goverment said. At the same time the European Union imposed tariffs on China-made EVs in 2024, industry lobbyists have urged the EU and national governments to bolster domestic players, more so that the sector grapples with a slowdown - to help even the playing field.
Under the arrangement announced on Monday, the state, Pontos and pension insurer Varma are also purchasing Valmet automotive’s shares in its subsidiary, battery maker Ioncor, giving the state a 70% stake in Ioncor through its investment company Finnish Minerals Group, reported Reuters.
