Category: Electric

Power battery industry faces serious overcapacity in China, says Changan chairman

China will need 1,000-1,200 GWh of power battery capacity by 2025, but the industry is already planning for 4,800 GWh of capacity, according to Changan's chairman.

The chairman of one of China's largest automakers has warned about oversupply in the power battery industry, at a time when the risk is a growing concern.

China's power battery industry is currently suffering from a serious overcapacity and the sector is bound to return to a rational state, Zhu Huarong, chairman of Changan Automobile, said today in a speech at an automotive forum in the southwestern Chinese city of Chongqing.

China will need 1,000-1,200 GWh of power battery capacity by 2025, but the industry is currently planning for 4,800 GWh of capacity, Zhu said.

In a speech at the 2022 China Auto Forum on November 9 last year, Zhu said the tight supply of chips and batteries facing China's new energy vehicle (NEV) industry had eased, but their expensive prices stand out, seriously affecting the profits and production of NEV companies.

High battery prices were caused by factors including raw material price increases, capital speculation, sellers' hesitation to sell and middlemen hoarding, Zhu said at the time.

Zhu's latest comments come as the issue of power battery overcapacity is a growing concern.

In a research note yesterday, Morgan Stanley analyst Jack Lu's team said that despite a near-term recovery in orders for China's battery industry, there will still be excess battery capacity and price competition is inevitable.

More and more second-tier battery suppliers are adopting increasingly aggressive pricing strategies, and may have to do the same, Lu's team said.

Power battery overcapacity is an industry consensus, but in the first quarter, expansion of power and storage batteries continued, the official Economic Information Daily said in a report yesterday.

In 2022, China's power battery shipments were about 480 GWh, while the installed power battery capacity was only about 260.94 GWh. Even counting the export volume and the installed power battery capacity in the segment including construction machinery, the current inventory pressure of the whole industry is still high, the report said, citing industry research institute GGII.

In the next few years, the structural overcapacity of power batteries will intensify, and the industry will enter a deep reshuffling stage, with a degree of competition that may be more severe than imagined, the report said.

China's power battery installed capacity in April was 25.1 GWh, up 89.4 percent year-on-year and down 9.5 percent from March, according to data released by the China Automotive Battery Innovation Alliance (CABIA) on May 11.

The power battery production in April was 47.0 GWh, up 38.7 percent year-on-year and down 8.3 percent sequentially, according to the CABIA.

May's data is expected to be available in a few days.

China EV battery installations in Apr: BYD regains top spot over CATL in LFP market

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BYD confident of gaining higher market share in next 3-5 years, says president

Wang believes that the NEV change is a technological revolution, and only companies with core technologies will survive.

is confident of gaining a higher market share in the next 3-5 years, said Wang Chuanfu, chairman and president of the Chinese new energy vehicle (NEV) giant, at its 2022 annual shareholders meeting today.

Commenting on the price war in China's auto industry, Wang said BYD's scale, brand and technology advantages will help it outperform its peers in future competition.

From January to April, BYD retail sales in China rose 79.2 percent to 702,608 units, taking the No. 1 spot with an 11.9 percent share, according to a ranking released last month by the China Passenger Car Association (CPCA).

FAW-Volkswagen sold 509,774 units at retail during the period, up 1.4 percent year-on-year, and ranked second with an 8.6 percent share, according to the ranking.

BYD sold 240,220 NEVs in May, up 108.99 percent from 114,943 units in the same month last year, according to data it released on June 1. The CPCA is expected to release its May sales rankings in the coming days.

On March 29, Wang said BYD aims to become the largest automaker in China by the end of this year.

The NEV industry is poised for big changes in the next 3-5 years, and the pace of change is now accelerating, Wang said today, adding that this is expected to accelerate further in the future and could exceed expectations.

For BYD, the toughest period is over and it will have a strategic opportunity period, Wang said.

BYD will leverage its existing industrial chain advantages, cost advantages, technology advantages and product advantages to further optimize its brand image and lead China's NEVs to the world, he said.

BYD has been vigorously expanding its production capacity in various regions since last year, and has now basically solved the problem of imbalance between supply and demand, Wang said.

The company's current production capacity and output of components can meet future market demand, he said, adding that BYD has made arrangements to meet the growing demand in overseas markets.

Wang believes that the NEV change is a technological revolution, and only companies with core technologies will survive.

If a company simply assembles, the probability of surviving is small, he said.

Companies that survive will also have a good strategic direction, because the industry's opportunity window is only 3-5 years, and the choice of models and technology lines is important, according to Wang.

He highlighted the importance of quick decision-making mechanisms, saying that auto companies tend to be large and have long decision-making mechanisms, but the NEV market is like a battlefield, requiring quick decisions.

Wang also mentioned his views on smart driving, saying that in the absence of changes in laws and regulations, smart driving technology is likely to be only an assist and difficult to commercialize.

In fully autonomous driving, any one safety accident will expose car companies to great responsibility and may drag down the sales of the whole model, he said.

Full CPCA rankings: Top-selling models and automakers in China in Apr

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Oh, What A Feeling! Australians Love Their Teslas! (May Update)

Australians love their Teslas. Over 4,400 were sold in May — 3,178 Model Y and 1,298 Model 3 electric vehicles. It is sad to see the number of Model 3s going down, but it is to be expected with the popularity of the SUV-shaped Model Y. Electric vehicles have maintained their approximately 7% penetration rate […]

Tesla asks Chinese suppliers to build plants in Mexico, report says

is asking several Chinese supply chain companies to build factories in Mexico in order to replicate a Giga Shanghai and its supply chain system there, according to local media.

(Image: Tesla China video screenshot)

China's well-established electric vehicle (EV) industry chain is one of the key factors in Tesla's success in the country. Now, the US EV maker is reportedly looking to replicate it in Mexico.

Tesla is asking several Chinese supply chain companies to build factories in Mexico to replicate a Giga Shanghai and its supply chain system there, local media outlet 36kr reported today.

Tesla's pace is urgent and suppliers could lose orders amounting to hundreds of millions of yuan if they don't respond in time, the report said, citing a person familiar with the matter.

On March 1, Tesla unveiled plans to build a factory in Mexico for the production of next-generation cars at an Investor Day event.

Mexican Foreign Ministry officials had said the plant would invest more than $5 billion and have a planned capacity of 1 million vehicles.

Some of Tesla's suppliers in China have announced plans to build factories in Mexico since the beginning of this year.

Ningbo Xusheng Group said in late March that it would build a production base in Mexico, with a total investment of no more than $276 million. Late May, the construction of the project was officially launched in Mexico's Coahuila state.

If all goes well, the plant will be ready for production in July or August next year, 36kr said, citing a source close to the project.

According to the report, a number of Chinese manufacturers of production line equipment have already set up offices in Mexico to take charge of design, after-sales support and other business aspects.

Mexico is now a hotbed of investment, many customers are coming over, and there are even supply chain companies bringing production line workers to Mexico to build factories, the report quoted a Tesla supplier source as saying.

Low labor costs, and industrial chain support are Mexico's advantages. However, there are supply chain sources said that Mexico is not as mature as the European and American markets, social and geopolitical risks are relatively high, the report noted.

On July 18 last year, Bloomberg reported that Chinese power battery giant was considering building a manufacturing plant in at least two locations in Mexico, possibly to supply Tesla and Ford.

The CATL sites would help Mexico cement its role in the region's electric vehicle production, which has long been a major part of the auto industry's supply chain, the Bloomberg report noted.

Tesla's revamped Model 3 nears final trial production in Shanghai, report says

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CATL extends coverage of its EVOGO battery swap service to Fuzhou

EVOGO's battery swap service was previously available in Xiamen, Hefei and Guiyang.

(Image credit: CnEVPost)

EVOGO, the battery swap service brand of , China's largest power battery manufacturer, has brought its service to a new city.

EVOGO's battery swap service is now available in Fuzhou, the capital of Fujian province, with the first three battery swap stations already in operation, CATL said on June 6.

By the end of this year, EVOGO's service radius in the Fuzhou urban area is expected to narrow to 8 kilometers, said Ningde, Fujian-based CATL.

EVOGO's operating entity, CATL's subsidiary Contemporary Amperex Energy Service Technology (CAES), signed a strategic cooperation framework agreement with the subsidiaries of Sinopec and State Grid in Fujian on June 6.

(Image credit: CATL)

CATL unveiled the EVOGO brand on January 22, 2022, which offers a battery swap solution consisting of battery blocks, fast battery swap stations, and an app.

The battery blocks, called Choco-SEB (swapping electric block) by CATL, are mass-produced batteries developed specifically to enable shared battery swaps, allowing consumers to pick and choose from one or more batteries to flexibly match their mileage needs.

(Image credit: CnEVPost)

EVOGO's battery swap service was officially launched on April 18, 2022, with Xiamen, Fujian being the first city to see the service available.

On June 18 last year, Hefei, Anhui province in eastern China saw the launch of EVOGO's battery swap service, becoming the second city to be covered by the service.

On December 12, CATL announced the expansion of EVOGO's battery swap service to a third city -- Guiyang in southwestern China's Guizhou province.

The first vehicle to support EVOGO's battery swap service is the NAT (Next Automatic Taxi) model of FAW's Bestune brand, which is aimed at the shared mobility market.

On April 27 last year, CATL announced that it had signed a framework agreement with EV startup Aiways to develop a battery swap-enabled model based on the Aiways U5, the second EVOGO battery swap-enabled model. Aiways is currently facing financial difficulties.

Last October 25, CATL said that the Dongfeng Peugeot-Citroën's Dongfeng Fukang ES600 sedan will have a variant capable of using EVOGO's battery swap service.

CATL officially unveils battery swap brand EVOGO, brings innovative battery block concept

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VW Seriously Doesn’t Want Dealers To Mark Up The ID. Buzz

The Volkswagen ID. Buzz, long a highly desired future electric vehicle with strong ties to the past, is coming to America. I talked with a Volkswagen exec several years ago about the Buzz. He was curious if I thought the Buzz would be popular in the US, and more importantly, if it would sell here. […]
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