Why LG, Panasonic and Samsung all building lithium battery factories in China?

Why LG, Panasonic and Samsung all building lithium battery factories in China?

Power lithium batteries are definitely a good business, even in the economic downturn; they can still help companies with battery business to expand their business better.

As one of the world's three largest suppliers of electric vehicle batteries, LG subsidiary LG Chem recently signed a battery supply agreement with automaker Chrysler to supply a 16-kilowatt battery and battery management system to the plug-in hybrid minivan, which expected to begin at the end of this year. Put into production.

At this point, LG Chem has established a partnership with the "Big Three" in the US auto market: In 2009, LG provided electric vehicle batteries for GM Volt, and reached a cooperation intention with Ford in 2010.

A spokesperson for LG Chem said, "The cooperation with Chrysler is critical to our achievement of the target for this year. In 2016, our electric vehicle battery sales target is 1.2 trillion won (about 63.6 billion yuan)." Last year, LG Chem Electric Car battery sales reached 700 billion won (about 37 billion yuan).

In order to improve research and development capabilities, LG Chem Power established in 2000 to develop and manufacture a variety of battery products. Lee Ung-beom, head of LG Chemical energy storage, said in a statement, "We are striving to take the lead in the global battery market, and building partnerships with the three major US automakers will help us achieve our goals."

LG Chem in China

In China, in August last year, LG Chem and Changan Automobile signed an order worth hundreds of billions of won to supply batteries for the latter's plug-in hybrid car; last September, LG Chem and Chery Automobile reached a cooperation intention, the latter's electric car Supply battery. A representative for LG Chem said, "Chery will have thousands of electric vehicles that will use our batteries, which further strengthens our position in the Chinese market." In addition to the above two, LG Chem's customers in China include Great Wall Motors. Dongfeng Motor, etc.

One reason for foreign battery manufacturers such as Panasonic, LG and Samsung to attract many auto manufacturers is that they have comparative advantages in terms of battery consistency, stability, and cycle life, and are attractive to downstream automakers.

"In the case of LG Chem, it is not only a supplier of auto giants such as Ford, Volkswagen, Audi, Nissan, etc., but also domestic automakers such as Great Wall Motor, Changan Automobile, Chery Automobile, and SAIC Group are also included in Changan Automobile. For example, LG Chem has been working with Changan Automobile on electric vehicle battery technology since 2009 to supply batteries for Changan Automobile's plug-in hybrid vehicles that will be mass-produced after 2016." The head of a domestic new energy vehicle listed company is accepting The media said in an interview.

With a precise understanding of domestic new energy vehicle policies and trends, LG Chem quickly entered into a cooperative relationship with many domestic auto companies and quickly finalized its investment intentions in China.

The LG Chemical Nanjing plant completed in October last year and plans to supply more than 550,000 battery products in China starting in 2016. In 2012, LG Chem established a battery plant in Michigan, USA to meet the growing needs of US customers. At the end of last year, the factory has four production lines in operation.

The Nanjing base will combined with South Korea's Wucang and the Holland Holland plant to form LG Chem's three global battery production bases. In this arrangement, the South Korea Wucang plant will become a complementary and regulating production plant, with Nanjing and US plants. Meet local customer needs. LG Chem's annual production of batteries in the United States can used for 120,000 plug-in hybrid electric vehicles, with a capacity of 350,000 in South Korea and 180,000 in China.

Japanese and Korean battery companies have built factories

China's lithium battery demand forecast from 2015 to 2020 (Source: Zhiyan Data Center)

According to data from the China Association of Automobile Manufacturers, in 2015, new energy vehicles produced 340,471 vehicles and 331,092 vehicles, up 3.3 times and 3.4 times respectively. Among them, pure electric vehicles produced 254,633 vehicles and 247,482 vehicles, a year-on-year increase of 4.2 times and 4.5 times; plug-in hybrid vehicles produced and sold 85,838 vehicles and 83,610 vehicles, an increase of 1.9 times and 1.8 times.

This trend will continue to double in the coming years. Domestic automakers such as Changan Automobile announced that it will invest 18 billion yuan in new energy projects in the next ten years, and plans to launch 34 new energy models; Chery hopes to sell 200,000 new energy vehicles in 2020; BAIC will also 2020 in the near future. The new energy sales target for the year has increased from 200,000 units previously set to 400,000 units.

Since last year, Internet-based car startups have sprung up. Most teams expected to launch production models in 2018 and 2019. Their demand for power lithium batteries is equally urgent.

Undoubtedly, the demand for power lithium batteries will peak in the next few years, and the outbreak of the new energy vehicle market will enable Japanese and Korean power-battery suppliers to enter China to build factories, to prepare for the market share of power lithium batteries. .

In 2014, the global lithium-ion battery for vehicles, Panasonic market share reached 45.7%

In addition to LG Chem's construction in China, at the end of October last year, Samsung SDI battery factory was put into production in Xi'an, and its production line will produce 40,000 high-performance automotive power (pure electric EV standard) batteries per year.

In addition, Panasonic will invest 50 billion yen (about 2.7 billion yuan) in Dalian, China to build a battery factory to increase battery supply to automakers, which expected to put into production in 2017. Panasonic's goal is to make the battery business's annual revenue in China reach 100 billion yen (about 5.79 billion yuan).

Global new energy vehicle development trend forecast

According to market report company B3, the global electric vehicle battery market expected to grow by more than five times by 2020, reaching $18.24 billion (only $3.26 billion in 2013).

Li Shengmao, an auto industry analyst at CIC, pointed out those electric vehicles will become the mainstream of new energy vehicles, and car batteries are the core components of electric vehicles. All countries' electric vehicle-related enterprises have invested a lot of work force and resources in this field, hoping to occupy a commanding height in the future electric vehicle field.

In the past two years, travel entrepreneurial projects is hot, from electric scooters, electric assist bicycles, electric balance vehicles, and electric scooters and electric vehicles, which have greatly stimulated demand for lithium batteries. An entrepreneur once told us that last year, due to the Tesla ModelX entering mass production; Panasonic tilted all of its battery capacity to large customers such as Tesla. Their products delayed due to insufficient battery capacity and had to choose LG or Samsung's lithium battery as a substitute.

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