Global automakers set up partnerships with Chinese EV battery firms
July 7, 2020 Category China News Round-up, Weekly
Leading global automakers are ramping up efforts to secure partnerships with Chinese EV battery firms to gain a share of the giant Chinese market and strengthen competitiveness worldwide, a move industry analysts say shows optimism in the world’s largest EV market despite a slowing global economy. Last week, German carmaker Mercedes-Benz announced a strategic partnership with the Chinese battery cell manufacturer Farasis Energy Co based in Jiangxi province, including taking an equity stake of around 3%. “China is the world’s largest electric car market with tremendous potential for further development. We are already working with strong and trusted partners in China, not only to enhance our local footprint but also to strengthen our competitiveness worldwide,” said Hubertus Troska, Member of the Board of Management of Daimler responsible for Greater China. The move, which is also the first time Daimler will take a stake in a Chinese battery cell manufacturer, will “enable us to pursue our electric strategy globally,” Troska said. Since 2015, China has been Daimler’s largest overseas passenger vehicle market. In May 2020, Mercedes-Benz sold nearly 135,000 passenger cars worldwide, with more than 70,000 vehicles sold in China, accounting for more than 50% of total sales.
Previously, German automaker Volkswagen became the biggest shareholder of China’s EV battery maker Guoxuan High-Tech Co with a 26.47% stake and investment worth €1.1 billion, a move marking Volkswagen as the first foreign auto firm to directly invest in a Chinese battery venture. Yu Qingjiao, Secretary General of the Zhongguancun New Battery Technology Innovation Alliance, told Global Times that Asian firms have an advantage in EV battery-making compared with their European counterparts.
According to South Korea’s market tracker SNE Research, Ningde-based Contemporary Amperex Technology (CATL) ranked No 1 globally in 2019 with a 27.9% market share and usage of its EV batteries rising 39% year-on-year to 32.5 Gigawatt hours (GWh). CATL was followed by Japan’s Panasonic Corp with a 24.1% market share and South Korea’s LG Chem with a 10.5% market share. CATL has signed supply deals with Tesla and Volkswagen, and expects to increase its battery manufacturing capacity in the next two years, Chairman Zeng Yuqun said. Tesla has reportedly chosen the leading Chinese battery maker as a partner to co-develop its next-generation battery, which will be cheaper and have a longer life. More global carmakers are set to join the race in the future, as investment in the Chinese EV battery-making sector will be a short-cut for them to dominate in the future EV era, the Global Times reports.
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