Globalization of customers, localization of production capacity, and low-carbon manufacturing are becoming the "new three modernizations" for the development of the power batteries industry. The global layout of power batteries will also face the two major challenges of globalization and low carbonization.
1. Two major challenges for global power battery
① Power battery globalization
Data show that in the first half of the year, the global sales of new energy passenger vehicles reached 4.21 million, a year-on-year increase of 71%, and continued to maintain a strong trend. China, the United States, and major European auto markets all achieved growth. Experts said that the penetration rate of new energy vehicles proposed by the Chinese government will reach 25% in 2025, which is likely to be achieved three years in advance, that is, this year. At the same time, new energy vehicles in Europe, North America and other markets are also growing rapidly.
Driven by carbon emission reduction and changes in the automotive industry, Europe, the United States and other regions are implementing strong new energy vehicle industry development strategies, and there is strong demand for power batteries. It is worth noting that while accelerating the promotion of electrification, the global auto power is strengthening the localization supply capacity of the power batteries industry. European and American car companies are seeking to cooperate with Asian battery manufacturers to land power battery production capacity in Europe and the United States, as well as localize the upstream industrial chain.
Undoubtedly, markets such as Europe and the United States will be a new huge incremental market for the development of China's battery industry chain companies. Since 2021, the speed of Chinese companies building factories in Europe has increased significantly. On September 5, 2022, CATL officially signed a pre-purchase land agreement with Debrecen, Hungary, and the Hungarian factory with a total investment of approximately 7.34 billion euros was officially launched. In June this year, Envision AESC announced that it will build a super factory in Navalmora de la Mata, Spain, with a planned production capacity of 30GWh, which will be completed and put into operation in 2025.
Also in June, GOTION HIGH-TECH announced that the first battery production and operation base in Europe will be located in Göttingen, Germany, with a planned annual production capacity of 18GWh. In addition, power battery companies in the world including SVOLT and Sunwoda have also built or plan to build large-scale power batteries production bases in Europe. It is foreseeable that with the release of the production capacity of Chinese companies in European factories, they will be able to achieve stable large-scale supply, thereby locking in global customers and markets, and further enhancing the participation and influence of Chinese companies in the international market.
② Power battery low carbonization
It should be pointed out that Europe has established relevant thresholds and standards for the localization of the battery industry chain. It means that Europe's control over the local power battery industry chain will be stricter. In addition, the United States has also passed carbon reduction related bills. It can be seen that carbon reduction in the power battery industry has become a consensus. In order for Chinese power batteries industry chain companies to deeply participate in the transformation and layout of global vehicle electrification, in addition to the competition in technology, products, production capacity, and supply chain, globalization of layout and low-carbon manufacturing will be essential.
In fact, under the pressure of policies and driven by industrial changes, international car companies are accelerating electrification transformation, formulating and releasing their own carbon reduction targets. According to relevant research reports, the carbon reduction contribution of pure electric vehicles in the entire life cycle is very obvious, but the carbon emissions of power batteries in the entire life cycle of pure electric vehicles account for nearly 40%. Therefore, after the realization of full electrification, the carbon reduction of the power batteries industry chain is particularly important.
Based on this, China's battery industry chain companies have begun to explore zero-carbon battery products that meet the requirements from the dimensions of zero-carbon products, zero-carbon factories, and zero-carbon industrial parks. For example, GOTION HIGH-TECH has gradually started to carry out carbon inventory work to explore suitable energy-saving and emission-reduction targets according to the operation conditions of different bases.
At the same time, it will build a zero-carbon factory with Volkswagen in Europe, and build a zero-carbon base for anode materials with an annual output of 400,000 tons in Wuhai, Inner Mongolia. Sunwoda has set the company's goal of carbon peaking in 2029 and carbon neutrality in 2050. In March 2022, the CATL Yibin factory has been built as a battery zero-carbon factory. SVOLT's first zero-carbon industrial park has been signed and landed in Sichuan on June 10, 2022.
The study found that the emissions of battery companies themselves only account for about 15% of the carbon footprint, and the carbon footprint of battery products mainly comes from upstream carbon emissions. In the upstream link, a number of leading companies in the industrial chain are also building zero-carbon factories. It is foreseeable that in the future, power battery companies will join hands with power, upstream materials, equipment, power battery recycling companies and other industrial chain companies to establish a battery life cycle carbon emission reduction plan to meet the needs of governments, car companies and their own carbon emission reduction.
It should be pointed out that China, Japan and South Korea are the largest battery industry clusters in the world. The four main materials and batteries of the global battery industry chain mainly come from Asia, especially China has obvious advantages in the battery supply chain. Chinese companies in the industrial chain have deeper professional knowledge and experience in battery technology and emission reduction. Therefore, in the formulation of global carbon footprint standards and regulations, Chinese companies should be more proactive and take a leading position.
In order for Chinese power battery industry chain companies to deeply participate in the transformation and layout of global vehicle electrification, in addition to the competition in technology, products, production capacity, and supply chain, globalization of layout and low-carbon manufacturing will be essential.