Hengyuan New Energy Geely, a subsidiary of Hongqiao Group, is increasingly ambitious in the field of power batteries.

Recently, HongQiao group (08137), according to the announcement will modify and components for Zhejiang Geely and Volvo cars two sales agreement signed.After modification, the two copy of sales agreement amount will further enhance cooperation, at the same time also give HongQiao group power battery business provides a new breakthrough.

HongQiao group's controlling shareholder is Geely group, through the Hong Kong listed companies, Geely indirectly control the shandong HengYuan new energy and new energy HengYuan zhejiang two dynamic powerThe batteryEnterprise.

Just last month, the media showed the zhejiang HengYuan new energy imports the LG in China last year in the proceedings of the production line and technology, increasing its investment in the field of power battery, which seems to be in for expanding HengYuan new energy electric vehicles matching for Geely's brand.

Obviously, Geely and Volvo huge orders will bring huge gains for HongQiao group, modify the agreement after the degree of cooperation between the two sides will further deepen.

But from the point of announcement, the real aim of HongQiao group did not stop there, its next also hope on the basis of the existing supporting, further extends it to seek external customers, not just only for Geely's vehicle power battery.

1, the award for Geely/Volvo super battery orders of $2.5 billion

As holding company of Geely group, HongQiao group positioning is "zhejiang Geely's different brand models main supplier of power battery", and the goal in the last year have been implemented, this mission is zhejiang HengYuan new energy.

Note: according to public information HongQiao group, Geely chairman li shufu and his son xing-xing li shareholders are HongQiao group.Among them, li individual has a 1.31% stake, xing-xing li via HongQiao group controlling shareholders HongQiao capital 32% stake.

And HongQiao group has two power battery company shandong HengYuan new energy, new energy and zhejiang HengYuan these two battery companies by indirect 49% stake HongQiao group, Shanghai power software has a 48% stake and jiaxing has a 3% stake, carol, by zhejiang Geely holding 90% stake in Shanghai power software.

On October 23, 2017, 25, HongQiao group released a statement, said its affiliated companies HengYuan new energy respectively with zhejiang Geely and Volvo car parts signed sales agreement, content related to business performanceThe ternary lithium ion batteriesThe package.But in recent days, HongQiao group, but the above two modified agreement.

Announcement shows that HongQiao group with Volvo cars and Geely in 2017 annual trade, January 1, 2018 solstice on April 30, accumulative total transaction amount is 4.22 million yuan only, is far from the trading amount of sales agreement, the main reason is that zhejiang HengYuan new energy is still under construction.

As you can see by the revised agreement, HongQiao group, although in the short term to reduce the power battery with Geely and Volvo transaction value of annual limit, but in the long term total transaction amount is not increased, indicating that HongQiao group attaches great importance to the cooperation with Geely group, degree of further deepening bilateral strategic cooperation.

It is important to note that behind the trading amount increase, perhaps with zhejiang HengYuan new energy import LG chem nanjing factory production line equipment and patented technology has a direct relationship.

In may this year, the Wall Street journal reported that "Volvo in the plug-in hybrid cars made in China will use South Korea's high-end battery technology, different from direct purchase, the LG chem power battery produced in zhejiang HengYuan."

Auto business review reported that Geely completed in April 2017, a wholly-owned bought LG battery factory in nanjing, the LG nanjing factory all the intellectual property right to the use of production equipment and manufacturing technology.LG will help Geely upgrade HengYuan new energy battery technology, achieves the LG quality standard, the complete production line at the end of 2017 and the debugging stage in mass production.

At present, zhejiang HengYuan new energy has Lynk&Co CMA platform supporting various models for Volvo cars and Geely's Volvo plug-in electric hybrid car accessory power battery and into the recommended directory, new energy vehicles subsidies can be obtained.

With Geely 2020 new energy vehicles which accounts for over 90% of the sales strategy gradually, HongQiao group is probably support Geely and Volvo electric ambitions of important chip.

2, HengYuan new energy greater ambitions

Change, increase of sales agreement cooperation HongQiao group is obviously bullish on the cooperation with Geely and Volvo in the future, the two sides will further deepen cooperation.But from the point of change the contents of the agreement, HongQiao group for positioning HengYuan new energy, are there any other plans.

HongQiao group said that in the short term, the group is expected to zhejiang Geely company to make sales, zhejiang HengYuan will account for most of the sales of new energy after the first production line put into production.Geely's different brand models using the company power battery, for the company to the world of mainstream car companies product order.

However, as the market competition and the pressure on the cost reduction, hosts, all want to have more high quality power battery supplier, battery enterprises must also improve the structure of the customer, reduces the risk of big customers rely on.Also the considerations and HongQiao group.

HongQiao group, points out that zhejiang Geely in any way without obligation to provide the group with new orders, if zhejiang Geely slash to the group issued a purchase order number, or complete termination and relation with the group's business, the group's business performance and financial performance may be adversely affected.

HongQiao group, in fact, the worry is not redundant, the current in addition to panasonic for tesla, Ningde era is gradually reduce the top five of the customer's business accounted, BYD plans to break the industry also closed loop for sale the power battery, fundamental purpose is to reduce the risk of customer focus.

Currently, Geely and Volvo is the only customer HongQiao group, customer business is highly dependent on the power battery may produce a great threat for the future development.

And with the help of the present stage and Geely and Volvo partnerships to create awareness company, as a springboard to new energy vehicles in China market to develop new customers, perhaps is the ultimate goal.

HongQiao group is currently to strengthen the construction of sales team and r&d department, in a different division, building relationships with new customers, different countries trying to disperse in medium and long term risk, for the future development of independent customers and take orders from other clients.

In perspective, HongQiao group and don't want to go to BYD after power battery self-marketing, but want to learn the Ningde era, from the perspective of the high-end market, with the cooperation of with Geely and Volvo to build top power battery supplier.

Perhaps, we obtain the LG Chem's technology, HongQiao group HengYuan new energy has a domestic and even international market position, but can achieve its ambitions in the field of power battery, so far remains to be inspection.

The page contains the contents of the machine translation.