Battery enterprises "bind" car companies to build local factories to reduce costs and make it clear that "carbon footprint" is the main factor.

Published: Nov 4, 2021 09:21
[battery companies "bundling" local car companies to reduce costs, clear "carbon footprint" is the main factor] the arrival of the global era of electric vehicles, so that the main engine factory and battery enterprises bind more closely. In order to occupy the "geographical advantage", the battery enterprise factory has been infinitely close to the mainframe factory and "tailor-made" the production line. "Power battery is the core component of new energy vehicles, vehicle companies hope to be able to control from the source." In the view of Wang Rongjin, partner of Shanghai Jinbang Equity Investment Management Company, power battery is a well-deserved "tight commodity".

With the advent of the global era of electric vehicles, the binding between main engine factories and battery enterprises becomes closer and closer. In order to occupy the "geographical advantage", the battery enterprise factory has been infinitely close to the mainframe factory and "tailor-made" the production line.

"Power battery is the core component of new energy vehicles, vehicle companies hope to be able to control from the source." In the view of Wang Rongjin, partner of Shanghai Jinbang Equity Investment Management Company, power battery is a well-deserved "tight commodity".

Choi Tae-won, chairman of South Korea's SK Group, announced on November 2 that he would invest about $26 billion in the United States for environmental protection businesses such as electric vehicle batteries and hydrogen. According to the plan, the SK Group will invest $52 billion in the United States by 2030.

Ford, an established native auto company in the United States, is an important partner of SK Group in the United States. In September, Ford announced that it would invest $11.4 billion with SK Innovation to build an Fmur150 electric pickup truck assembly plant and three battery plants in the United States to accelerate its foray into electric vehicles. SK will invest US $4.45 billion in the project.

In addition to SK, another American car company that works with Ford, it has also targeted South Korean battery suppliers.

In April, LG New Energy and General Motors 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. The plant is similar in size to Ultium Cells, the first LG-GM joint venture battery plant in Ohio, with an annual capacity of 35GWH, and is scheduled to start operating in 2022.

The same is true of Chinese power battery manufacturers. According to foreign media reports, Fisk, a US electric start-up, said that Ningde Times had agreed to provide two different battery solutions for its Ocean SUV, with an initial battery capacity of more than 5GWh per year from 2023 to 2025. On Oct. 15, Electric Last Mile Solutions, a US commercial electric vehicle maker, announced that it had reached an agreement with Ningde Times to supply batteries for its all-electric commercial vehicles and ensure battery supply until 2025.

Although Fisk needs a fraction of the 5GWh battery capacity for Ning Wang, and the two sides did not disclose the mode of supply, in cooperation with Electric Last Mile Solutions, the latter revealed that the two sides are considering building a battery factory in the United States.

In fact, the Ningde era had already taken action in Germany before the news came out that the Ningde era would build a battery factory in the United States. On Oct. 28, Daimler CEO Corinson (Ola Kallenius) said its luxury car division, Mercedes-Benz, would switch to cheaper but lower-power lithium iron phosphate batteries to stem the surge in the price of some metals in its entry-level models. Although Daimler did not make it clear whether it would purchase batteries from Ningde era, which had previously reached a co-operation agreement, the German plant of Ningde era was undoubtedly designed to ensure the supply of power batteries for European carmakers.

In addition, in July this year, as an important partner of Volkswagen, Guoxuan Hi-Tech acquired the Bosch Group's Gottingen plant in Germany to establish its first new energy production and operation base in Europe; in July of the same year, Honeycomb announced that it would supply power batteries for the upcoming Stellantis Group's new electric vehicles from 2025, and Honeycomb would invest 2.4 billion US dollars to build a plant in Germany.

Also in July this year, Renault reached a partnership with Vision Power, which provided five-year 40GWh to 120GWh power battery orders to Vision, which will build power battery plants in Douai, France, Sunderland and other places. Vision technology, which has orders in hand, is once again favored by investors. Sequoia Capital China announced on October 31st that he will invest hundreds of millions of US dollars in the business of Vision Technology Group to deepen the strategic cooperation between the two sides in the field of carbon neutralization.

"Battery companies and car companies can build factories after binding orders, which can reduce the pressure on funds, reduce risks and investment costs." Some industry analysts said that in addition to cost and risk factors, the strict regulations on the "carbon footprint" of the whole industry chain in Europe and the United States are also the main reasons for battery companies to consider building factories at home.

On January 26 this year, the European Union informed the World Trade Organization of the proposed regulations on batteries and waste batteries, upgrading the current battery control mode from "directives" to "regulations". According to the new regulations, from July 1, 2024, only related products that have established a carbon footprint declaration can be put on the market, and the "carbon footprint" of the battery must be forcibly verified by a third party.

"with regard to the label information on batteries, the low-carbon and decarbonization transformation of the power battery industry has become the most direct driving force for the entire automobile industry to go out." Wang Pan, senior director of Sinochem data Corporation, said. For power batteries, the "carbon footprint" involves not only the carbon emissions in the manufacturing process, but also the summary of carbon emissions in the production and transportation of upstream raw materials. This requires battery enterprises not only to reduce carbon emissions in the production process, but also to standardize the statistics and use of the "carbon footprint" information of the four main materials of batteries.

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Battery enterprises "bind" car companies to build local factories to reduce costs and make it clear that "carbon footprint" is the main factor. - Shanghai Metals Market (SMM)