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"bundled" car companies, battery companies have rushed to enter the world's third largest electric vehicle market.

iconOct 20, 2021 17:05
[bundling "car companies" battery companies are scrambling to enter the world's third largest electric vehicle market) after the Biden administration made it clear that the US auto industry will vigorously transform to electrification, the United States, the world's third largest electric vehicle market, is attracting the world's major car and battery companies to shake off their arms. In May, Ford announced plans to invest more than $22 billion in electrification by 2025 to develop smart pure electric vehicles, which will account for about 40 per cent of sales by 2030.

The United States, the world's third-largest electric car market, is attracting the world's major automakers and battery companies to shake off their arms after the Biden administration made it clear that the US auto industry is making a strong transition to electrification.

In May, Ford announced plans to invest more than $22 billion in electrification by 2025 to develop smart pure electric vehicles, which will account for about 40 per cent of sales by 2030.

In June, GM announced that it would invest $35 billion in electric vehicles by 2025, launch 30 new electric vehicles worldwide by 2025, and achieve its goal of selling more than 1 million pure electric vehicles a year in the United States and China. It is worth noting that GM planned to spend $27 billion on electric vehicles by 2025 last year (up from $20 billion before the outbreak) and about 30 per cent higher in June.

As a global leader in electric cars, Tesla is even more aggressive. At Tesla's 2021 shareholders' meeting in early October, Tesla CEO Musk said that Tesla will maintain a new car delivery growth rate of at least 50 per cent in the next few years. Tesla wants to achieve his "ambitious goal" of annual sales of 20 million vehicles by 2030.

American car electrification cake coveted not only local companies, including Volkswagen, Toyota, Hyundai, Stellantis, Nissan and many other European and Asian car companies are also sharpening their knives.

On the government side, the Biden government announced that it would launch a $174 billion electric vehicle support program, aiming to reach 50% of pure electric vehicle sales by 2030 and take the initiative in the global electric vehicle industry chain competition.

As the saying goes, before the army moves, food comes first. As the "heart" of electric vehicles, in order to develop electric vehicles, it is necessary to give priority to power batteries.

Driven by the radical transformation and goals of a number of car companies, the domestic market in the United States will generate strong demand for power batteries in the coming years.

Jim Farley, Ford's chief executive, said that without working with battery makers with mass production experience, some carmakers are unlikely to succeed in their own efforts to make batteries. The implication is that the goal of electrification will be difficult to achieve.

Paul Jacobson, GM's chief financial officer, said, "the use of electric vehicles is increasing and reaching an inflection point." We want to have the capacity to meet the demand at any time. " According to GM's electrification goal, GM's battery demand is expected to reach 100 GWh, by 2025, which is expected to double by 2030, and has the potential for further expansion.

Tesla predicts that its power and energy storage battery demand in the global market may reach the scale of 3TWh by 2030.

In fact, in order to promote the development of the local power battery manufacturing industry in the United States, in June, the U.S. Department of Energy announced four measures, including $200 million for power battery research and development, and $17 billion in loan support. promote energy storage applications and the US Lithium Blueprint 2021-2030 issued by the Advanced Battery Alliance of the United States.

The Biden administration's goal is to increase the production of electric vehicles and reduce America's dependence on imports of batteries, components and key materials.

For the car companies themselves, if they want to promote the landing of the electrified goal, then it is necessary to start a rapid layout in the field of power batteries. Perhaps, the experience of the Chinese and European markets provides a model for American car companies to follow. Car companies entering the North American market mainly choose to be "bundled" with battery companies in the field of power batteries with heavy assets, deep technology and strict management. on the one hand, it can ensure a stable supply of batteries and reduce costs; on the other hand, it can reduce related inputs and reduce battery risks (such as recall risks caused by quality).

For battery enterprises, the project investment of tens or even hundreds of GWh often has great pressure and risks in terms of funds, orders and technical iterations, and cooperation with car companies can not only bind orders, but also reduce risks with the investment and drive of car companies. In addition, it is also good for grabbing market share in North America ahead of time.

The "bundling" mode of automobile enterprises and battery enterprises has become a new feature of the North American market.

Stellantis, the world's fourth largest automotive group (established in January 2021 as a result of the merger of French car company Peugeot Citroen and American-Italian joint venture Fiat Chrysler) announced an agreement with LG New Energy that the two companies will set up a new battery factory as a joint venture to produce batteries in North America. The new plant is scheduled to start work on Q2 in 2022 and start production of Q1 in 2024. The plant's preset capacity target will reach 40GWh.

Battery China learned from LG New Energy that the power batteries produced by the joint venture plant will be installed on a new generation of new energy vehicles under the Stellantis Group brand and will meet the supply of Stellantis Group's vehicle plants in the United States, Canada and Mexico.

Samsung SDI has also reached a memorandum of understanding with Stellantis to build a joint venture plant in North America to produce electric car batteries for the North American market, according to sources. The location of the battery plant to be built by Samsung SDI and Stellantis in the United States is still under evaluation and will be announced at a later date, the source said.

According to Battery China, the joint venture plant built in the United States in cooperation with Stellantis Group will be the fourth power battery plant of LG New Energy in the United States. LG New Energy and General Motors have planned to build two battery joint venture plants in the United States.

Although GM's pace of electrification is not as powerful as Tesla, it is also quite radical under the global electrification tide. In terms of battery cooperation, the cooperation project with LG New Energy has taken the lead in landing.

Back in 2012, LG Chemical, the parent company of LG New Energy, built its first North American battery factory in Michigan, which provided battery kits for GM's Chevrolet Volt.

Seven years later, after GM identified a large-scale transition to electrification, in December 2019, GM announced another partnership with LG Chemical, with a total investment of $2.3 billion to set up an electric car battery joint venture in Ohio, with Ultium Cells, holding 50 per cent and the new plant with planned production capacity of 30GWh.

In April, General Motors and LG New Energy announced plans to build a second joint venture battery plant in the United States, located in Tennessee, with an investment of about $2.3 billion.

GM plans to spend $35 billion on electric vehicles by 2025. According to related sources, in order to enhance GM's battery protection capability in the United States, in addition to the two battery plants currently under construction with LG New Energy, GM plans to add two more battery plants in the United States. The investment in the two plants is included in the above-mentioned investment plan of US $35 billion.

For its part, in September, Ford announced a partnership with SKI to build two super factories in Tennessee and Kentucky with a joint investment of $11.4 billion to produce electric pickups and power batteries, which are expected to start production in 2025. Of this total, Ford invested US $7 billion and SKI US $4.4 billion.

The partnership comes after Ford and SKI set up a battery joint venture in May-- BlueOvalSK, each owns 50%, and plans to invest $5.3 billion to build two battery plants in the United States with a total annual production capacity of 60 GWh.

The total amount of battery investment determined by both sides has increased significantly again compared with the last time, and the capacity of power batteries has also increased. Specifically, BlueOvalSK will build battery plants for 43GWh and 86GWh in Tennessee and Kentucky, respectively, with a total annual capacity of 129GWH, shared by BlueOvalSK and SKI.

In terms of battery technology, it is reported that the joint plant between Ford and SKI in the North American market will produce NCM batteries with a nickel content of more than 90%. At the same time, SKI is also interested in considering the layout of lithium iron phosphate (LFP) production line to meet the battery needs of Ford's low-cost models.

In addition to its partnership with Ford, SKI is investing $2.6 billion to build its battery plant in Georgia, USA. The first plant has an annual capacity of 9.8 GWh, and the second plant has a planned capacity of 11.7 GWh, with a total capacity of more than 20 GWh,. Production is expected to start in 2022-2023. Coupled with the joint venture with Ford, SKI's battery capacity in the United States will reach 150GWh.

Recently, Toyota announced that it will spend $1.3 billion to build a battery plant in the United States. Toyota Motor will co-fund with the group's Toyota Trading Co., Ltd. to set up a new company in the United States and strive to start production in 2025. This is the first time Toyota has set up a car battery factory in the United States. It is reported that the new plant will produce lithium-ion batteries for hybrid vehicles (HEV) at an early stage, and will also consider making (BEV) batteries for pure electric vehicles in the future.

Toyota expects electric vehicles to account for nearly 70% of its u.s. sales by 2030, and Toyota plans to invest $3.4 billion to promote electrification by 2030.

As the third largest electric vehicle market in the world, the battery demand and market opportunities that the United States can provide can not be ignored for battery players.

Recently, Norwegian battery startup Freyr announced that it will work with Koch Strategic platform to build a super battery factory in the United States, which will use the semi-solid battery technology provided by US 24m Technology to produce lithium batteries and plan annual production capacity of 50GWh. The first phase of the new plant is expected to be completed in 2023.

Freyr's announcement of a plant in the United States also means that its battery layout has expanded from continental Europe to North America to compete in the North American power battery market.

In mid-October, US commercial electric vehicle maker Electric Last Mile Solutions,Inc. (ELMS) announced that it had signed a battery supply agreement with Ningde Times, which would supply batteries and ensure production capacity for its all-electric commercial vehicles.

According to media reports, ELMS will continue to work with Ningde Times on battery localization in the future. The two companies are also considering building a battery plant in the United States to ship the batteries to ELMS's plant in Indiana to assemble battery packs, an ELMS spokesman said.

It is reported that Ningde Times bought a factory in Glasgow (Glasgow), Kentucky, in 2020, but so far it has not disclosed whether it will set up a factory in the United States. According to media reports: Ningde Times said that it has acquired the Glasgow LSC plant in Kentucky and will carry out overseas investment layout based on market demand, investment environment and other factors.

The ELMS may not be impressive, but for the Ningde era, building a factory in the United States would be of great significance.

Another Chinese battery company, Vision Power, has also set up a power battery plant in Tennessee, with a current capacity of 3GWh. However, since the beginning of this year, Vision Power has expanded production in factories such as the UK and Japan several times, and planned a new power battery factory in France. It is understood that Vision Power also intends to expand production in the United States in the future to meet the needs of the North American market.

In addition, a number of domestic battery companies, including Funeng Technology, Weihong Power, Guoxuan Tech, and other domestic battery companies have also set up R & D centers or branches in the United States, and they will not rule out participating at the right time in the future. With the landing of battery enterprises, domestic power battery industry chain enterprises will also participate in the future.


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