Chinese battery manufacturer Farasis Energy has secured a substantial supply agreement with GAC Aion to provide batteries for the European versions of the Aion V SUV and the upcoming Aion UT compact electric vehicle. The contract, which exceeds 10 GWh in total capacity, represents a significant milestone for Farasis in international markets and supports GAC’s European manufacturing strategy.
Local Production Strategy Avoids EU Tariffs
According to CN EV Post, citing official GAC announcements, Farasis batteries will be integrated into European models of both the Aion V and Aion UT. These vehicles are positioned as flagship products for GAC Aion’s European expansion. The mid-size SUV Aion V recently entered production at contract manufacturer Magna Steyr’s facility in Graz, Austria. The inclusion of the Aion UT in the battery supply agreement indirectly confirms that this compact electric vehicle will also be manufactured locally in Europe rather than imported from China.
By producing vehicles within the European Union, GAC avoids the additional tariffs imposed on battery-electric vehicles imported from China. This manufacturing strategy mirrors that of Xpeng, whose G6 and G9 models have been produced at the same Magna facility since September 2024.
SPS Technology and Battery Specifications
The batteries supplied under this agreement utilize Farasis’ Super Pouch Solution (SPS) technology, featuring large-format pouch cells with lithium iron phosphate (LFP) chemistry. While the partners have not disclosed the specific delivery timeline or exact battery capacities, the 10 GWh total order volume could theoretically equip over 100,000 electric vehicles with 100 kWh battery packs.
CN EV Post described the deal as a “significant breakthrough for Farasis’ SPS battery products in overseas markets.” Despite being one of China’s smaller battery manufacturers with approximately 0.02 percent market share, Farasis has established itself in niche applications. Current models using the SPS solution include the Geely Radar RD6 Horizon electric pickup, as well as the second-generation GAC Aion V and Aion UT sold in China. The collaboration between Farasis and GAC Aion extends back several years.
GAC Aion’s European Market Position
The Aion V is currently available in several European markets, including Finland, Poland, and Portugal. Initial sales consisted of vehicles imported from China, but recent deliveries include locally manufactured units from the Magna facility. The vehicle offers competitive specifications and generous equipment at an accessible price point, though it does not feature cutting-edge technology or standout innovations.
GAC and Magna announced the start of series production in Europe in November 2024, following rumors that first surfaced in March about contract manufacturing arrangements in Graz. Magna handles vehicle assembly exclusively, while GAC maintains control over distribution networks. According to Magna’s November announcement, “GAC plans to expand into further European markets through new partnerships as well as service and distribution networks,” though specific target markets and production capacity allocations were not disclosed.
Magna’s Mixed Production Capabilities
The Magna vehicle plant in Graz operates flexible mixed production lines capable of manufacturing internal combustion engine vehicles, hybrids, and electric cars simultaneously. Notable electric vehicles produced at the facility have included the Jaguar I-Pace and Fisker Ocean (both now discontinued), along with the current Mercedes G-Class EQ technology variant and the two Xpeng models. Traditional combustion-engine models such as the BMW Z4 and Toyota Supra also roll off the same production lines.
The partnership between Farasis, GAC, and Magna represents a strategic alignment of Chinese automotive manufacturing with European production capabilities, enabling market access while circumventing trade barriers and establishing local manufacturing credentials in the competitive European EV market.
