The story appears on

Page C1

October 23, 2017

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Autotalk Special

Charging up an industry at the heart of clean motoring

It’s no secret. China wants to lead the world in the manufacture and use of clean-energy cars. But that won’t happen easily if the nation doesn’t also lead the world in battery research, development and production.

Small wonder then that batteries have become a vital industry.

China plans to further accelerate the development of battery-related technologies to boost industrial upgrade of new-energy vehicle sector, according to an industry development plan published in April this year.

The government will actively promote research and development of key battery cell parts and improve management structures in the industry in order to achieve a “revolutionary” breakthrough in the industry, the plan said.

“China is the biggest market for electric mobility, and China ranks first in industrialization of electric vehicles,” said Ferit Küçükay, managing director of the Institute of Automotive Engineering at Technical University Braunschweig and chairman of CTI (Car Training Institute) Symposium China. “This means that car production on one side and cell production on the other are making China a very innovative country.”

No one doubts the government’s commitment to go full throttle toward a future where clean energy vehicles dominate the roadways, reducing air pollution and dependence on fossil fuels. Batteries sit at the heart of that ambition because the better they are at providing long-distance trips at cheaper costs, the more a somewhat dubious public will embrace the new age in automotives.

“China has more than 100 electric vehicle battery suppliers now, with about four or five leading companies,” said David Zhang, an independent automotive consultant. In the future, the development of new-energy vehicles will drive up demand for batteries. Competition is expected to become fiercer.”

He added, “Batteries play such an important role in electric vehicles. At present, the battery accounts for 30 percent to 50 percent of the entire electric car cost. In some cases, nearly half the cost.”

In most cases, battery suppliers provide those key parts to car manufacturers, but some electric automakers, like BYD Co, are producing their own batteries out of a realization that owning the allied technology will give them a boost in the electric car business in China.

Some car manufacturers are choosing to open their own battery assembly plants, while others are forging closer relationship with battery suppliers.

General Motors, in tandem with Chinese partner SAIC Motor Co, is opening a battery plant in Shanghai later this year, according to Mary Barra, chairman and chief executive officer of GM during a press conference in September in Shanghai.

“SAIC-GM’s battery plant has begun pilot assembly production of batteries that will be used in our growing new energy vehicle fleet planned for China,” said Barra.

GM said it is rolling out at least 10 new energy vehicles in China between 2016 and 2020 and almost all its models under Buick, Cadillac and Chevrolet in China, will offer options that range from mild hybrid cars to fully electric vehicles by 2025.

“China is a key market for General Motors’ electrification solutions,” said Barra, “We are going to improve battery technology in order to make electrified vehicles more desirable and affordable.”

Earlier this year, SAIC Motor established two joint-venture companies with the Chinese lithium battery manufacturer Contemporary Amperex Technology Co, based in Ningde, Fujian Province.

The partnership will establish a battery production center in Changzhou in Jiangsu Province. The first-phase of investment will be about 10 billion yuan, with production scheduled to begin sometime next year.

The venture is an example of an ideal partnership in the new age of automobiles. SAIC brings strength in clean energy car production, while Contemporary Amperex has advantages in battery cells, modules and related technologies.

The aim is to create cars with longer battery life and easier charging, SAIC said.

Such collaboration can reduce costs and accelerate development. BYD has collaborated with Hefei Guoxuan High-Tech Power Energy Co on lithium batteries.

And in May, Hyundai Motor said it has selected Contemporary Amperex as its first battery supplier in China.

A report from credit rating agency Fitch Ratings said some car manufacturers have announced plans to consolidate their positions in the battery supply chain, citing cooperation between Volkswagen and Contemporary Amperex. Fitch Ratings said such collaboration will expand in the car industry.

Increasing battery demand is a boon to Chinese battery suppliers.

“China is a large market for battery suppliers and is very attractive for both international and domestic suppliers,” said Arthur Wang, a partner at McKinsey & Co. “Domestic battery suppliers have a distinct advantage in the power battery market at present because of subsidies available to them.”

According to the new-energy vehicle list released by the Ministry of Industry and Information Technology, we see that most new-energy vehicle models use batteries from domestic suppliers.”

Indeed, locally made lithium-ion cells are used in more than 90 percent of the vehicles produced by Chinese manufacturers, according to German consulting firm Roland Berger.

The largest battery producers in China include BYD Co, Contemporary Amperex, Tianjin Lishen Battery Joint-Stock Co and Wanxiang Group, the report said.

Hand-in-hand with battery production is battery recycling.

“China now has about one million electric vehicles, a relatively small scale,” Wang noted. “But the number of vehicles will increase with time. By 2020, there are expected to be five million electric cars. The importance of recycling batteries is also going to increase.” He said a recycling system needs to be regulated and sustainable in order for the clean energy car industry to show robust development.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend