Chinese automaker GAC Group announced plans on Thursday to invest RMB 10.9 billion (nearly $1.6 billion) in setting up an electric vehicle battery firm, as the Toyota manufacturing partner races to scale up its own battery production amid rising costs and a supply shortage. The wholly owned subsidiary will begin constructing a battery plant with an annual capacity of 26.8 gigawatt-hours (GWh) by December. They will initially produce affordable lithium iron phosphate (LFP) battery packs for Aion, the EV unit of the state-owned manufacturer, followed by other business divisions after 2025. EV startup Nio made a similar move, currently building a $32.8-million battery research facility in Shanghai. [GAC statement, in Chinese]