The Global Road of China’s Power Battery Supply Chain

The Global Road of China’s Power Battery Supply Chain

2021 is a critical year for the global power battery to embark on the new journey of MWh. The Chinese power battery team is actively landing on the international stage, demonstrating the advantages of scale and technology "spillover".

Global electrification is accelerating, and Chinese companies go ahead of the rest.

GGII predicts that the global penetration rate of new energy vehicles will reach more than 20% by 2025, driving the global power battery shipments to reach 1100GWh, officially entering the TWh era.

Under the carbon neutrality target, the energy storage market will also start rapidly. GGII predicts that the global energy storage battery shipments will reach 416GWh in 2025, with a compound annual growth rate of about 72.8% in the next five years.

In the supply chain, lithium battery material companies have deepened the long-term order binding of global top battery companies, and while the production capacity has jumped, new materials and new technologies are competing for the flow, and the global voice has been continuously strengthened; lithium battery equipment companies are also accelerating their entry into the supply chain of international giants , the research and development of new equipment and new processes challenge the limit of intelligent manufacturing, and the weight of international roles is increasing day by day.

According to the incomplete statistics of Gaogong Lithium Battery, in 2021, Chinese power battery companies have won more than 20 overseas orders. Up to now, there have been more than 25 cases of Chinese lithium battery industry chain companies going overseas to build factories/investment projects. Among them, Europe has become a hot spot for Chinese lithium battery companies to invest, and North America, Southeast Asia and other regions are also heating up.

Combined with overseas orders and plant construction layout, the globalization process of China's lithium batteries mainly presents several major characteristics:

1st, with a large number of overseas orders in hand, the globalization strategy of Chinese power battery giants has been upgraded to accelerate the evolution of the market structure.

Holding huge orders or project designations and reaching long-term cooperation with overseas customers has become the direct reason for Chinese power battery companies to go overseas. So far, among the Chinese power battery companies, CATL, Envision Group, SVOLT, Farasis Energy, BYD, CALB, and GOTION have clearly or have already started to build factories in Europe.

In 2021, CATL will cooperate or step up cooperation with international car companies such as Hyundai, Volkswagen, Daimler Trucks, Tesla, BMW, Fisker, etc.; Envision Group has joined hands with Renault and Nissan to "make a move" in UK and France; EVE Energy has won Jaguar & Land Rover 48V fixed-point and large energy storage orders in the United States; GOTION has provided technical support to Volkswagen and established its first new energy production and operation base in Europe.

In terms of market structure, from January to October 2021, domestic battery companies such as CATL, BYD, CALB,  GOTION, and Envision Power has steadily occupied the top 10 in the world in terms of installed capacity, and their total market share will increase from 35.8%to 47.1% in 2020. The market share of Japan and South Korea companies represented by Panasonic, LG New Energy, Samsung SDI and SKI has declined.

Table-1 Overseas cooperation of Chinese power battery companies in 2021

 

2^nd, the globalization of China's lithium battery materials and equipment has accelerated, and China's lithium battery industry chain has gradually become a trend to go overseas.

The rapid rise of the electrification market in Europe and the United States, the large-scale expansion of power battery companies has led to a surge in the demand for materials and equipment, and a number of Chinese lithium battery companies with the ability to "go global" have successively established factories around the world.

In terms of manufacturing core materials for power batteries, China has a global lead, with cathode materials accounting for 42% globally, anode materials 65%, electrolytes 65%, and separators 43%. In addition, supporting opportunities such as conductive paste and structural parts are also increasing significantly.

Based on this, lithium battery material companies including Tinci Materials, Capchem, Kedali, Cnano Technology, Easpring Technology, SEMCORP, Jiangsu GTIG, Lopal Group, Sinodmc and other lithium battery material companies have established subsidiaries in one or more countries. and supporting projects.

Table-2 Overseas layout of Chinese lithium battery materials companies

 

In addition, as domestic top equipment companies enter the supply chain of international first-tier battery companies, the speed of "going overseas" is also accelerating. Leading lithium battery equipment companies such as Lyric Robot Automation, Hymson Laser, Lead Intelligent, KATOP Automation and UW Laser have entered the market. The supply chain of international car companies/power battery giants, the globalization path has gradually extended farther.

Table-3 Overseas layout of Chinese lithium battery equipment companies

 

3^rd, the battery industry is moving from made in China to designed in China. The establishment of a global intellectual property system for Chinese enterprises has accelerated, and Chinese products, Chinese technologies, and Chinese solutions have begun to "spill over" overseas in all directions.

European and American economies are accelerating their embrace of electrification, and have invested heavily in the deployment of battery links to supplement the chain and strengthen the chain. However, it is unrealistic to quickly build up its own technology R&D and supply chain capabilities in the short term, and it must rely on external forces to empower it.

Relying on the competitiveness of technical reserves, industrial chain support, and large-scale manufacturing accumulated over the years, Chinese products, Chinese solutions, and Chinese technologies are deeply involved in the construction of its battery industry.

In this process, Chinese lithium battery companies are also accelerating the construction of a global intellectual property system. Taking Shenzhen Capchem as an example, in the process of internationalization, it focuses on overseas intellectual property layout and capability output. Additives with independent intellectual property rights enter the supply chain of overseas enterprises, and sales account for more than 30%.

Another example is the field of cell simulation design. China took the lead, mastered independent intellectual property rights from the beginning, and stood on the high ground in this field. The Chinese company Suzhou Electroder has delivered a complete set of cell design solutions for a super battery factory in Europe, meeting the customer's rapid implementation from early demand to production.