Geely invested $8 billion to build its own factory and plan to complete and put it into production by 2020.

Recently, Geely established Hubei Greely Hengyuan New Energy Technology Co., Ltd. through its subsidiary in Wuhan. The new company injected 50 million yuan in capital, mainly producing power batteries. Xuzhihao, CEO of Geely Group, also serves as chairman of the new company.

The new company in Hubei will become an important production base for Geely's new energy power batteries, Geely said. The new factory is located in the second phase of the Xintan Economic Complex. The total investment of the project is 8 billion yuan. The construction of battery and module production lines and R&D centers, integrated office buildings, and logistics distribution centers are completed. The project will be implemented in two phases. It plans to complete the site selection and preliminary work in 2018, and will be completed and put into operation in 2020.

Self-built battery plants are a precursor.

But Geely is not content with more than that in the power cell sector, after an agreement was reached in April 2017 between LG Chemical and Geely Group, which wholly acquired the right to use intellectual property rights for all production equipment and manufacturing technology at LG Nanjing Plant. Subsequently, Geely Group demolished the factory's production equipment to its Hengyuan battery base in Jinhua, Zhejiang Province.

In recent years, Geely has continued to deepen its distribution in the field of new energy. This is mainly due to the "Blue Geely Action" strategy proposed in 2015. It plans to produce and sell 2 million vehicles by 2020, and new energy products account for 90 % of the total. In the new energy field, the proportion of plug-in hybrid vehicles and hybrid vehicles accounted for 65 %, and the proportion of pure electric vehicles accounted for 35 %. Combined with Geely's target of 2 million vehicles by 2020, this also means Geely will sell 1.8 million new energy vehicles annually in two years.

Li Shufu, chairman of Geely Group, once said: "Geely is 90 % of new energy vehicles in 2020" and it is still far from this goal. Geely's models are still dominated by fuel vehicles, and new energy models have Emperor EV, Emperor GS, and Berry GE. The difference between the number and type of fuel models is relatively obvious. And if you want to achieve the goal as soon as possible, with new energy models occupying the majority, then power batteries will be the key technology link. At the same time, to win the market in the future, both good enough battery technology and production capacity are indispensable. At this time ahead of the layout of the power battery market for Geely, is very necessary.

In fact, Geely car has been in the top position in the local brand, its new energy is steadily advancing, the new products are almost all new energy vehicles, the next step more new models start is 48V weak mix. While we hardly doubt the correctness of Geely's new energy road, one question that comes with the 1.8 million new energy sales is whether the battery backing behind it will be enough to support Geely's vast new energy empire as new energy capacity emerges.

New energy route from outsourcing to self-produced Geely

From the catalogue released by the Ministry of Industry and Information Technology, we can see that several of Geely's existing new energy models, Emperor EV, Emperor PHEV, and Emperor GSe, all use Ningde batteries, as the mainstream industry chooses. This is also a unicorn that most car manufacturers can not avoid.

What is not difficult to find is that although Geely is currently dominated by the Ningde era batteries, Geely did not follow and did not stand in the central vortex in this "kidnapping" battle. Geely seems to still have a backhand, whether it's Rink or Bree GE's plans on the battery.

Although the Bree GE core was provided by the Ningde era, the integration and battery pack was undertaken by Weirui Electric Vehicle Technology (Suzhou) Co., Ltd. Then who is Wei Rui? According to the information of the Bureau of Industry and Commerce, Wei Rui is actually a subsidiary of Geely Holdings that specializes in the development, manufacturing, and sales of electric vehicle drive systems (power battery systems, electronic controls, motors, and system integration). In addition to providing battery packs to Bori GE, Wei Rui will also provide battery pack services for more models such as DHL GLPHEV in the future.

The company, which has less news and less information, is adding to Geely's new energy business. In 2017 alone, Weirui had orders for 500 Geely Group and 2,000 Volvo battery packs, sales of about 200 million yuan, and planned 300,000 battery pack production capacity. At the same time, Weirui is still expanding its production capacity. In addition to Suzhou Company, Geely also established Wei Rui Ningbo Company and planned and built 500,000 battery packs in Hangzhou Bay.

Geely previously completed a wholly-owned acquisition of LG Nanjing Battery Factory in April 2017 and obtained the right to use all production equipment and manufacturing technology intellectual property of LG Nanjing Factory. LG will help Geely Group upgrade Hengyuan New Energy's battery technology to meet LG's quality standards.

Whether it is the binding of several car companies to the era of Ningde or the opening of BYD's own battery business, it is enough to prove that power cells will determine the pace of development of new energy sources. As a very knowledgeable entrepreneur, Li Shufu will naturally not let others control the throat of development when he implements his own new energy strategy.

Just as Volkswagen is considering mass production of solid-state batteries starting in 2024 or 2025, Li shufu will surely take his fate into his own hands in the face of key core technologies, such as power cells, that determine the development of new energy sources. After all, he will put eggs in one basket. Not the thinking of a legendary businessman.

The page contains the contents of the machine translation.