The Finnish state has taken a decisive step to secure control over Valmet Automotive, a major vehicle contract manufacturer, by buying out the stake held by Chinese battery giant CATL—now blacklisted by Western defence authorities. This marks a pivotal shift for Valmet Automotive, with a strategic focus on contract manufacturing for the defence industry and a move away from dependence on electric vehicle battery partnerships with China.
The State Buyout: A Strategic Shift
In early September 2025, Finland’s government, together with Finnish investor Pontos Group, acquired CATL’s 20.6% share in Valmet Automotive, raising the state’s total ownership to 79%. This deal included a state capital injection of approximately €35–37.5 million, intended to stabilize Valmet Automotive amid declining EV demand in Europe and to reposition the manufacturer’s strategy for the future.
CATL’s Blacklisting and Geopolitical Context
The buyout coincides with CATL’s increasing scrutiny in the West. In January 2025, the U.S. Department of Defence added CATL to its list of Chinese “military companies,” limiting the firm’s ability to secure defence contracts with NATO states and subjecting it to heightened regulatory pressure. Allegations have also been raised by U.S. lawmakers concerning human rights abuses and forced labour in CATL’s supply chains, though the company denies these claims. Europe’s worsening geopolitical climate, particularly due to Russia’s actions in Ukraine, has added urgency to Finland’s effort to nationalize high-value industrial capabilities.
Valmet Automotive: Expanding Beyond Cars
Valmet Automotive has a 55-year legacy of contract vehicle manufacturing for brands such as Mercedes-Benz, Porsche, and Saab. But as electric car sales have underperformed forecasts and geopolitical risks mount, Valmet will now leverage its industrial expertise in serial production beyond the automotive sector, with an explicit focus on defense production. The firm’s subsidiary specializing in battery systems, IONCOR, will become part of the state-owned Finnish Minerals Group, reinforcing Finland’s domestic control over critical technologies and supply chains.
Implications for the Nordic and European Markets
This move fortifies Finland’s industrial resilience, reducing reliance on Chinese technology suppliers and foreign capital for strategic industries. By retaining and repurposing a unique industrial asset for defence and infrastructure needs, Finland aims to set an example for other Nordic states facing similar geopolitical uncertainties.
Industry Outlook
- Finnish state owns 79% of Valmet Automotive post-buyout.
- CATL exits as Western defence blacklists expand.
- Defence and security manufacturing become new focus areas, supported by state capital.
- IONCOR spun off to strengthen state control over battery technology value chains.
This transformation underscores the Finnish commitment to industrial sovereignty and security of supply—an imperative for the entire Nordic region amid rising global tensions. Valmet Automotive’s new chapter may signal further Nordic government interventions in high-tech and strategic industries.