China's Sinopec, CATL to promote EV battery exchange

China's state-controlled Sinopec on 13 March signed a strategic co-operation agreement with the country's largest electric vehicle (EV) power battery manufacturer CATL to develop battery exchange for EVs and energy storage in a number of energy sectors.

The two firms aim to deepen their strategic co-operation to accelerate industrial transformation and upgrading to make greater contributions to the country's targets of promoting green, low-carbon and high-quality development of the energy industry, Sinopec said.

Sinopec and CATL will form a joint venture to accelerate development of battery exchange for electric passenger cars and explore the viability of rolling out battery exchange to commercial vehicles.

The two firms have also agreed to speed up development of energy storage in industrial and commercial areas, energy storage power supply at oil refineries and petrochemical facilities, and promote energy storage as an alternative to diesel generators.

The co-operation will also include promoting demonstration application of optical storage and charge microgrid technology. More details including the investment and capacities of the projects were undisclosed.

Sinopec has strengthened investment to increase its penetration in the new energy market in the past few years. It in November 2021 put three EV battery charging and exchange stations into operation in Shenzhen and Dongguan cities in south China's Guangdong province. Sinopec has built more than 6,000 of such stations in 370 cities in China by the end of 2023, achieving a previous plan to build 5,000 stations during the 2021-25 14th five-year plan in advance.

It in May 2021 also signed a co-operation framework agreement with domestic automaker Great Wall Auto to promote industrialisation, technology research and development, and capital operation of hydrogen energy.

More conventional fuels companies are expected to step up their efforts to seek transformation given expectations that transport fuels — gasoline, diesel and jet fuel — will peak in 2024, against a backdrop where global vehicle electrification has been advancing rapidly in the past decade, particularly in China to reduce carbon emissions.

CATL has been successful deploying capacity for EV power batteries in China, especially the lithium iron phosphate (LFP) battery, with the majority of China's battery market now dominated by the high thermal stability, long-lasting cathode active material. Its installed power battery volumes took up 43pc of the country's total volumes in 2023, industry data show.

China's decarbonisation targets for 2030 and 2060 have helped to significantly boost its EV sales, leading global sales growth in the past decade. China aims to raise new energy vehicles' (NEVs) share in its total vehicle sales to 45pc by 2027, according to a plan issued by the Party Central Committee and State Council in January.

The country earlier this month emphasised its ambition to accelerate "high-quality" development of unconventional energy to strengthen energy security at a communist party politburo meeting. The meeting identified areas that need further development, including the EV charging network. China had built more than 9mn EV charging points by the end of February, according to industry estimates.