Drive Battery Trends of Foreign Companies in China

Since the drive battery is a core component of electric vehicles, there is increased attention on the rapid growth of the Chinese electric vehicle market. Looking at component electrification by foreign automobile manufacturers in China, many companies procure drive batteries from their local joint ventures and Chinese battery suppliers, while some companies introduce their own technologies in China.

VW has said that demand for drive batteries in the Chinese marketplace will reach 150GWh by 2025. To meet the need for drive batteries, VW has approved A123 Systems as a supplier of lithium-ion batteries in addition to CATL. While BMW procures from local companies, it is also introducing its own technologies. In September 2020, BMW launched the second phase of Brilliance BMW's drive battery center to produce BMW's fifth generation batteries. Daimler is proceeding with a business partnership between Farasis Energy and CATL. It aims at shortening of development period, improving energy density, and reducing related cost.

GM is introducing its own technology. In August 2020, SAIC GM announced plans to introduce a new-generation Ultium battery system in the future. Meanwhile Tesla selected LG Chem as a drive cell supplier in November 2020 in line with the automaker's growing production of electric vehicles in China. Tesla is planning to install LG Chem's NCM battery in the Model Y produced at Tesla's Shanghai plant. It is also expected to introduce low-cost, long-life drive batteries developed jointly with CATL in early 2021.

Japan's Honda is also promoting a business alliance with CATL. In July 2020, Honda acquired about 1% of the shares of CATL by underwriting a third-party allocation of new shares. Both companies are proceeding with joint development of batteries for new-energy vehicles and joint research on basic technologies.

South Korea's LG Chem and SK Innovation are focusing on locally producing drive batteries in China. LG Chem plans to boost the annual capacity of its Nanjing Plant to 32GWh by 2023. It will mainly supply Tesla's factories in China.