Written by / Zhang Nan
Editor/ Wu Jing
Design / Shi Yuchao
At the moment when global carbon emission reduction is becoming stricter, the wave of electrification is in full swing, and the installed capacity of power batteries is also continuing to grow, and the market is expected to exceed 1TWh of global power battery installed capacity by 2025.
In this context, China's power battery companies have also relied on years of accumulation of competitiveness in terms of industrial chain support and collaboration, large-scale manufacturing capabilities, cost control and other aspects, and have "spilled" into the European and American markets, accelerating the transformation of the global automotive market to electrification.
"From the supply chain point of view, the continental power battery industry chain is complete, 70% of the world's battery production capacity is in China, and the product supply is global." Although the United States and Europe are making every effort to build a battery industry chain, in general, the industrial competitiveness of China's power batteries is difficult to shake for a considerable period of time. In December last year, Ouyang Minggao, an academician of the Chinese Academy of Sciences, said so at the 2021 annual media communication meeting of the China Electric Vehicle 100 Association.
As he said, under the cultivation of the industry for many years, China has almost formed the world's most complete new energy vehicle industry chain. Facing this round of huge "gap" in the EU and us battery industry, Chinese power battery companies with international competitive technical strength and production capacity will undoubtedly benefit from it.
On March 16, local time, Mercedes-Benz of Germany announced that it has reached a strategic cooperation with Envision Power, a battery technology company under Envision Technology Group. Officials said that Envision Power will provide high-quality, high-safety and zero-carbon power battery products for Mercedes-Benz's new generation of luxury pure electric SUV star models EQS and EQE. In addition, Envision Power will give full play to the advantages of leading products and the global production capacity layout, and rely on the Group's green technology and zero-carbon system solutions to fully support the realization of Mercedes-Benz's "2039 Carbon Neutral Vision".
Envision Power also announced that it will build a new digital zero-carbon battery super factory in the United States and achieve mass production in 2025, which will be Envision Power's second battery plant in North America.
This cooperation with Mercedes-Benz is also a global cooperation with Nissan, Renault, Honda and other mainstream car companies, and once again joined hands with international leading car companies to lay out the European and American markets. The number of international leading car companies in the list of vision customers is increasing.
It can be seen that represented by Vision Power, China's power battery is accelerating its "attack on the city" in overseas markets.
Go, go to Europe and america
When new energy vehicles become an inevitable trend in the development of the global automotive industry, Chinese lithium battery companies are bound to compete for this huge market cake, not to mention the shortage of power battery supply faced by the acceleration of electrification in Europe and the United States:
At the 2021 EU Battery Union Conference, European Commission Vice President Maros Sefcovic said that there is a huge gap in the supply of power batteries in the EU, and it is necessary to strive to achieve autonomy in the power battery industry in 2025.
According to SNE Research's forecast, by 2023, the demand for electric vehicle batteries in Europe will reach 406GWh, the supply will be 335GWh, and there will still be a shortage in the market. By 2025, the supply gap will further widen to around 40%.
The same situation is also in the US market: in order to improve the weak situation of the US power battery industry chain, in May 2021, the Biden administration announced the launch of a $174 billion electric vehicle support program. In addition, in order to promote the large-scale manufacturing of power batteries in the United States, in June of the same year, the U.S. Department of Energy announced four measures, including providing $200 million for power battery research and development, providing $17 billion in loans, promoting energy storage applications, and supporting the "American Lithium Battery Blueprint 2021-2030" released by the American Advanced Battery Alliance.
Undoubtedly, under the dual impetus of policy and market, the demand for power lithium batteries will usher in a peak in the next few years, and many power battery companies have gone to sea to enter the supply chain of international mainstream car companies and win international orders.
But on the other hand, as the COVID-19 epidemic continues to break out, multinational car companies are becoming more and more aware of the vulnerability of the existing global supply chain system under the impact of risk, and have begun to cultivate local supply chain systems. Under the new round of production capacity expansion cycle, lithium battery companies such as CATL Times, Envision Power, Hive Energy, Fu Neng Technology, BYD, and AVIC Lithium Battery have identified or started to build factories overseas.
Just last week, foreign media said that CATL plans to build a power battery factory in North America, with a total investment of up to 5 billion US dollars, the target annual production capacity will reach 80GWh, and more than 10,000 employees will be employed after production, and the power batteries produced will be prioritized for supply to Tesla and other manufacturers.
So among the many options, why does Mercedes-Benz favor long-range power? According to the analysis of automotive business review, there are three main factors: first, more than ten years of global operation experience, which has a unique advantage in overseas market competition; second, high-quality products and production capacity; third, zero carbon technology bonus.
First mover advantage
For China's power battery companies, behind the sea is both an opportunity and a challenge.
Although in recent years, Chinese companies have achieved rapid development in battery technology and have shown their sharp edge on the international stage. However, according to industry insiders, mainland power battery companies generally have problems such as insufficient experience in cooperation with international car companies, and differences in culture and working methods. Going overseas to build factories requires companies to invest a lot of time and cost in culture, talent management, supply chain and other aspects.
At present, China's power battery going overseas is mainly facing challenges in four aspects: laws and regulations, labor, cultural differences, and supply chain:
First of all, Chinese enterprises going to sea must adapt to the constraints of local laws and regulations abroad, especially the strict environmental protection laws and regulations in the European and American markets, which may make the methodology of Chinese enterprises that are not familiar with overseas laws and regulations in China become unsatisfactory.
Second, the cost of employment is high and there is a shortage of skilled workers. In the lithium battery industry, skilled workers are very important resources, almost every enterprise going to sea will face the problem of overseas recruitment difficulties and high employment costs, how to train a large number of workers in the short term in strict accordance with the regulations is a great challenge.
Third, cultural differences can lead to conflicts between Chinese and Western management concepts and management methods.
Finally, the complete domestic supply chain is the "bottom line" of China's power battery companies, but with the requirements of de-globalization and the localization of the lithium battery and electric vehicle industries in Europe and the United States, the localization of the supply chain will be a big test for all Chinese battery manufacturers going overseas.
Envision Power UK plant, which was put into operation in 2012
Unlike other domestic battery companies, Envision Power has more than ten years of overseas operation experience and capacity layout in multiple developed markets, and has explored a more mature global management model: familiar with local laws and regulations, trained a large number of skilled workers, and accumulated a more localized supply chain layout. For overseas car companies, the localized supply chain means the guarantee of production capacity and the reduction of procurement costs.
Up to now, Envision Power has 10 production bases in Japan, the United States, the United Kingdom, China and France. As the only Chinese company with a factory in the United States and the capacity to supply capacity, Envision Power's Tennessee plant in the United States has been in operation for nearly 10 years.
High quality production capacity
In addition to the advantages of global production capacity, entering the supply chain of the world's top car companies and providing power battery products for Mercedes-Benz's new generation of luxury pure electric SUV star models EQS and EQE is the most reliable endorsement of the quality of Envision Power products.
As we all know, in the era of fuel vehicles, S-Class models are the representative of the forefront, technology and luxury quality of the Mercedes-Benz brand, and the new EQS is also known as the "S-Class" of the electric vehicle world. Ola K llenius, Chairman of the Board of Directors of Mercedes-Benz AG, once said, "The new EQS, which combines craftsmanship, sustainability, high technology and trendy design, is a pure electric model that does not compromise in any dimension. ”
Mercedes-Benz's intransigence to the new EQS will inevitably be reflected in the choice of power battery suppliers. It is reported that in response to this cooperation, the German headquarters of Mercedes-Benz conducted a comprehensive review of Envision Power's global operations, involving products, manufacturing, operations and other aspects.
The cooperation between Envision Power and Mercedes-Benz is a project for the supply of overseas production bases, and the factory audit is carried out simultaneously in China and the United States.
Automotive Business Review also learned that Mercedes-Benz has developed a more detailed set of audit standards based on the audit standards of the German automotive industry - there are more than 2,000 product requirements for module projects, while battery pack projects are to be doubled, covering from the performance and quality of the product itself, to the production process, quality, logistics, warehousing management at the manufacturing site, to corporate social responsibility, carbon emissions and other aspects of the assessment, in-depth assessment of suppliers' product design and development, software and hardware design, development process, standard understanding 3. Risk control, change management, product verification and other aspects of the ability, especially the automation level of the production line, the guarantee of the information system and the overall quality of personnel.
It is the basis for suppliers to thoroughly understand and follow these stringent standards. In addition, for the specific implementation measures of suppliers, Mercedes-Benz further requires them to land through meticulous and digital process guidance, so as to avoid deviations at the execution level caused by human subjective understanding deviations.
Other well-known German automobile OEMs such as BMW and Volkswagen are also similar ultra-high standards, and the requirements are higher and stricter than those of domestic car companies.
Zero carbon initiative
In April 2021, Envision Power's parent company, Envision Technology Group, said it would achieve carbon neutrality in global business operations by the end of 2022 and carbon neutrality in the whole supply chain by the end of 2028. Vision thus became the first Chinese company to commit to carbon neutrality across the value chain. Underpinning this commitment is Envision's zero-carbon system solutions as a green technology company.
In December 2020, the European Commission proposed a new battery regulation requiring that from July 1, 2024, only electric vehicle batteries that have established carbon footprint declarations be placed on the market. However, the carbon neutrality plan of the European Union and the United States has given companies such as Vision Power huge room for development, and even "development initiative".
It is worth mentioning that in the path and technical scheme of zero-carbon transformation of power batteries, the zero-carbon industrial park pioneered by Vision has become a "sample case" for the global power battery industry chain to achieve zero-carbon transformation.
In October 2021, Envision Technology Group launched the world's first zero-carbon industrial park in Ordos, Inner Mongolia, to create a new industrial system "model" with energy storage and power battery projects as the core of the industry - based on ordos's rich local renewable energy resources and smart grid system, to achieve high proportion, low cost and sufficient renewable energy production and use; at the same time, with intensive top-level design to form an upstream and downstream integrated industrial chain around power batteries and energy storage, electric heavy trucks, battery materials, green hydrogen production and so on.
It can be seen that the long-term zero-carbon power battery can not only match the increasingly stringent carbon emission standards, but also effectively help car companies reduce the carbon emissions of the whole vehicle and accelerate the transformation of the overseas power battery industry chain to zero carbon.
Domestic and foreign countries go hand in hand
Vision Power is not only breaking through in overseas markets, but also its domestic business sector is also advancing rapidly.
As early as September 2021, Envision and China FAW Group reached a comprehensive strategic cooperation, the two sides will carry out in-depth cooperation in green travel, green energy, high-end power batteries, zero carbon industrial parks, renewable energy systems and other fields, jointly promote the integration of electric transportation networks and new energy networks, and create a green automobile industry ecology.
Like its cooperation with Nissan, Renault and Mercedes-Benz in britain, France and the United States, the cooperation between Envision and China FAW is not simply at the level of power battery supply chain, but relies on Envision's accumulation in renewable energy, zero-carbon technology and other fields, and carries out deeper integration and synergy with FAW in the role of "zero-carbon technology partner".
In February this year, Envision signed a strategic cooperation framework agreement with Shiyan City, Hubei Province, and 1 month later, envision power 40GWh battery project was officially signed to settle in Shiyan, the first phase of production this year, the speed of promotion is fast, which shows the importance and expectation of both sides to this project. According to reports, in addition to laying out a power and energy storage battery manufacturing base in Shiyan City, the two sides will also cooperate in five major projects such as commercial vehicle intelligent power exchange network and equipment manufacturing, and zero-carbon vehicle technology research.
In addition, the first phase of envision power's fourth largest battery production and R&D base in Jiangyin, Wuxi, was put into operation last year, with a total planned production capacity of 20GWh. The power battery and energy storage plant in Ordos is accelerating construction, and with the gradual release of production capacity, Envision Power will have the ability to provide high-quality power batteries for domestic car companies.
It is believed that with the acceleration of the dual carbon era, as the long-term driving force of the global Tier1, it will also become the choice of more domestic car companies' power batteries.
This article was originally produced by Automotive Business Review
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