Chinese battery companies have been accelerating construction of overseas production plants this year, in response to rising overseas demand and governmental efforts to reduce resource dependence.
Such efforts include the US' Inflation Reduction Act (IRA) and the EU's Critical Raw Materials (CRM) Act. Starting from 2024, EVs in the US will be required to increase the percentage of minerals in their batteries that are extracted and processed in the US, in a country with which the US has a free trade agreement, or recycled in North America to qualify for tax breaks and subsidies under the act. This requirement will rise to 80pc by 2026.
Major Chinese lithium-ion battery manufacturer Sunwoda unveiled a plan on 26 July to build a new energy vehicle (NEV) power battery plant in Hungary, with an investment of no more than 1.96bn yuan ($273.57mn) for the first phase of this project. More details, including the construction schedules and launch dates, were undisclosed.
Sunwoda is not the first Chinese battery company that has invested in battery production in the central European country. China's largest producer Contemporary Amperex Technology (CATL) is building its second European battery production facility in east Hungary's Debrecen, which is expected to start pilot production next year. China's largest EV producer BYD, which is already producing electric buses in Hungary, is also planning to build a battery assembly plant in the country's Fót town.
Sunwoda has been expanding its output capacity in recent years, with a combined planned capacity of 500 GWh/yr in the coming years. It on 19 April released a fast-charge battery to be used in EVs that has a driving range of 1,000km and takes only 10 minutes to charge from 20pc to 80pc.
Major Chinese lithium-ion battery manufacturer EVE Energy plans to build a battery production facility in Thailand. It will establish a joint venture with Thailand's renewable energy producer Energy Absolute (EA) which will hold 51pc of the venture, with EVE taking 49pc. The battery factory will have a nameplate of capacity more than 6 GWh/yr, with an undisclosed launch date.
EVE is one of China's 10 biggest power battery manufacturers. It installed 6.61GWh of lithium battery power batteries in the first half of this year, accounting for 4.4pc of China's total volume.
Other Chinese companies that have accelerated their plans to invest in overseas production recently include Huayou Cobalt. The firm finished building its first overseas battery recycling plant, with a processing capacity of 12,000 t/yr for black mass in South Korea's Gwangyang city, and plans to build a facility for nickel sulphate and battery precursors in North Gyeongsang province's Pohang city with South Korean battery materials producer Posco Future M.
Chinese battery cathode producer GEM is also on track to build a battery precursor plant in Saemangeum, South Korea in partnership with South Korean battery material firms SK On and Ecopro Materials. Major Chinese lithium-ion battery manufacturer Gotion High-Tech has begun building a lithium-ion battery facility in Germany with a design capacity of 20 GWh/yr to meet local demand.
Chinese battery feedstock firms Huayou, Tsingshan, GEM and Lygend have also invested in production projects in Indonesia, which sits on the world's most abundant nickel resources.
The IRA has also spurred greater EV battery investments in northeast Asia, particularly Japan and South Korea this year.
Argus forecasts that global demand for lithium-ion batteries will rise to 4.5TWh by this year as a result of the expanding EV sector.
