Future looks bright for electric cars in China

View of the charging facilities at the production site in Daxing district, Beijing, July 23, 2014. [Photo/IC]

"As automakers are racing to make cheaper electric cars with longer battery life, they become more price conscious," he said. "A foreign investment will add more cost to the production, so we have to be very cautious in selecting the deals."

Beyond questions of what kind of deal it might be, Zhang said it is clear that the core value for a foreign takeover lies in its future potential, driven by research and development and technology breakthroughs in the battery industry like whether the batteries can retain charge at extreme temperatures.

Apart from Germany, countries in Southeast Asia such as Vietnam and the Philippines are also among top export destinations for Tianneng, the first battery company listed on the Hong Kong Stock Exchange in 2007.

A couple of years ago, the battery maker set up offices in Vietnam, mainly for lead-acid battery export.

Tianneng is not the only company reaching out to foreign markets for battery technology and betting big on the growth of electric vehicles in China.

In 2013, Chinese auto parts supplier Wanxiang Group outbid a United States-based firm, Johnson Controls, to purchase most of the assets of A123 Systems, which develops lithium-ion batteries, for about $256.6 million.

Chengdu-based Tianqi Lithium, which claims to be the world's largest hard rock lithium converter and makes a variety of raw materials for the battery industry, is another company that has clinched an overseas deal. In 2013, the battery raw material company became a major shareholder of Talison, a lithium producer with projects in Western Australia and Chile.

Experts said more Chinese firms will pursue M&A deals in the battery industry, as the government is charting steps to reduce its carbon footprint and optimize its energy mix, thereby sparking new interest in electric vehicles.

But up till now, there has been no major technological breakthrough in China's battery making industry, even with large investments.