Belgian battery component maker Umicore will invest €300m to increase its production for lithium-ion batteries sixfold by 2020, due to growth in demand for electric vehicles. The extra capacity will be to meet demand from Chinese electric cars and buses, and European carmakers, which are expanding electric car fleets, the company’s chief executive said. Umicore said demand for the company’s battery materials is “outpacing the market by a significant margin and the increased capacity will enable Umicore to cater for a surge in customer orders”. The money will be invested in Umicore’s plant in South Korea and in Jiangmen in China, it said, with first production lines expected to be commissioned in late 2018. Along with a $160m investment plan announced last year, the additional $300m will result in a more than sixfold increase in total capacity by 2020 compared with 2015. The company, which can trace its roots to the Congolese mining company Union Minière, which was founded in 1906, has for 15 years helped supply material for mobile phone batteries. It now aims to double earnings by 2020 and capture the growing market for electric vehicles. The company’s shares have risen 26 per cent over the past year and rose 3 per cent on Monday to €56.61. Marc Grynberg, Umicore’s chief executive, said it had benefited from “ethical” sourcing of cobalt, a key battery material, amid growing scrutiny over cobalt supply from the Democratic Republic of Congo. Last year, Amnesty International issued a report saying very few companies “are taking steps to meet even the most basic due diligence requirements” when it came to sourcing of cobalt from the DRC for batteries. “We have a definite competitive advantage from having this widespread effort in sourcing cobalt in an ethical manner more than 12 years ago,” Mr Grynberg said. “Even though other people are now trying to clean up their own supply chain it will take time to get there.” Analysts at Liberum estimate that the market for cathodes in electric vehicle batteries will grow by five times in the next five years to $4bn and Umicore will capture about 20 per cent of the market. The cathode is key to how much power a battery can store. While battery makers are aiming to reduce costs of the materials by reducing metals such as cobalt, the company will benefit from growing average size of batteries in electric cars that gives them greater range, Adam Collins, an analyst at Liberum said. Umicore makes cathode materials for nickel-manganese-cobalt (NMC) batteries, which are widely used in electric cars. The company supplies major battery companies such as LG Chem, Samsung SDI and China’s BYD, according to Liberum.