Source to China Times, due to weak demand and inventory piling up, the prices of a key chemical raw material, lithium carbonate, have recently been on a declining trend. Since the launch of lithium carbonate futures on the mainland on July 21, in just over two months, the price of lithium has fallen by nearly 100,000 CNY, marking a 39% decrease. In late September, lithium carbonate futures prices briefly dropped below 150,000 CNY per ton, reaching 145,000 CNY, marking a new low since their introduction.

Market analysts suggest that the current price of lithium carbonate futures on the mainland is around 150,000 yuan per ton. In the short term, prices are susceptible to the impact of supply contraction. While there may be some upward momentum following the sharp decline, the strength of the rebound is limited.

According to STCN from China, in the spot market on October 4, the benchmark price for battery-grade lithium carbonate was 175,000 CNY per ton, showing a monthly decline of over 20% compared to the 224,000 CNY per ton at the beginning of September. The benchmark price for industrial-grade lithium carbonate on the same day was 161,000 CNY per ton, reflecting a decrease of 23.33% by MoM.

Ruida Futures stated that from a fundamental perspective, the current situation of relatively ample lithium carbonate supply has not changed for now. With the recovery of operating rates in 2Q23, demand has not met expectations, leading to the inventory kept piling up, and continuous price declines.

Despite facing sanctions from the United States, Huawei continues to advance its 5G technology by gradually reducing reliance on American components in its base stations. Meanwhile, the White House is rallying its allies to block the adoption of Huawei’s 5G equipment. However, these challenges haven’t deterred Huawei’s commitment to research and development.

…

According to Taiwan’s Economic Daily, Hon Hai Precision Industry Co., also known as Foxconn, is set to begin mass production of its electric vehicle Model C in the fourth quarter. With electric vehicles offering higher profit margins compared to iPhone assembly, this move is expected to further boost Hon Hai’s profit margins and strengthen its overall profitability structure as it continues to pivot towards a higher proportion of higher-margin products.

Based on the Model C, developed by Hon Hai’s subsidiary Foxtron, the company is also working on the electric vehicle “n7” for its customer, Yulon Group’s Luxgen brand. It has already received pre-orders for approximately 25,000 units and plans to start mass production in the fourth quarter of this year, with gradual deliveries starting in January next year. The company is aiming to export these vehicles as early as 2025, contributing to Hon Hai’s electric vehicle business achievements and expanding its electric vehicle manufacturing footprint.

The Luxgen n7 electric vehicle will offer three different versions, all equipped with Level 2 advanced driver-assistance systems (ADAS). These three versions include the standard model with a range of 420 kilometers, the long-range version with a range of up to 700 kilometers, and the performance version, capable of accelerating from 0 to 100 kilometers per hour in under 3.8 seconds. The prices range from TWD 999,000 to TWD 1,299,000, making it the only pure electric vehicle priced below one million New Taiwan Dollars in the Taiwanese market.

(Photo credit: Luxgen)

According to a recent report by itdcw, several Chinese new energy companies unveiled ambitious overseas expansion plans during the last week of September, with the highest investment commitment reaching almost a billion dollars.

This development comes as global demand for batteries skyrockets, driven by the rapid growth of the overseas new energy automotive and energy storage industries. Chinese companies in the new energy industry chain are strategically positioning themselves across the globe to better serve the expanding oversea markets.

Five Companies Announce Overseas Expansion in a Week

The hustle week could tracked back to a significant announcement from Ningbo Shanshan Co., LTD on September 27th. Their intention to establish a project company in Finland, aiming to invest in the construction of an integrated base capable of producing 100,000 tons of lithium-ion battery negative electrode materials annually. The total investment for this venture is not expected to exceed 1.28 billion euros.

On the very same day, a subsidiary of Lopal Technology signed a MOU with LG Energy Solution, Ltd. This agreement outlines their collaborative venture to operate a cathode material factory in Indonesia, further expanding the global footprint of Chinese battery companies.

XTC New Energy Materials also made a significant move on September 26th, announcing their plans to establish Joint Venture in France. This strategic collaboration with the French company Orano is set to build a production line with an annual output of 40,000 tons of ternary cathode materials, bolstering their presence in the European market.

Not to be outdone, CATL unveiled their investment plans in Indonesia on September 25th. Their vision includes the construction of Indonesia’s first project for the production of 30,000 tons of high-nickel power battery ternary precursor materials in the Indonesia Morowali Industrial Park, Central Sulawesi Province. The total investment for this endeavor is approximately 109.6 million RMB.

Additionally, South Korea’s LG Chem is gearing up with Huayou Cobalt on September 24th. Together, they are planning to establish an electric vehicle battery material factory in Morocco, slated to commence production in 2026. Their target is an annual output of 50,000 tons of lithium iron phosphate cathode materials.

Not Random: Calculated Choice to Overseas Moves for Expansion

China’s surplus battery production capacity and skyrocketing prices in recent times have left the battery industry chain market sluggish. This has prompted companies to explore overseas markets as a natural expansion strategy. The EU’s new battery regulations and the U.S. Inflation Reduction Act have set new standards and prerequisites for Chinese battery industry chain enterprises venturing abroad.

Europe’s appeal stems from its stringent EU environmental regulations, which have been pushing for the development of electric vehicles. Hungary’s strategic location has positioned it as a major export production hub for renowned automakers like Mercedes-Benz, BMW, and Audi. Its prime geographical location and excellent transportation links make it an ideal gateway to the entire European market.

Indonesia’s selection is attributed to its abundant resources, particularly nickel, of which it holds a quarter of the world’s reserves. Moreover, Indonesia ranks high in global cobalt production. This makes it an attractive destination for battery companies and upstream material enterprises, ensuring a stable supply of essential raw materials.

South Korea is appealing primarily due to its opportunities for collaboration with local companies. Battery material enterprises often find the initial capital requirements and other aspects of independent overseas expansion daunting. With recent international policy changes, Chinese counterparts are favoring collaborative approaches to establish a presence in South Korea.

However, it’s crucial to acknowledge that expanding abroad, while offering access to more overseas market resources, also amplifies risks and pressures borne by these enterprises. This strategic move will test their adaptability and resilience in navigating the complexities of global markets.

In summary, Chinese battery companies are aggressively expanding into overseas markets to meet the surging global demand for batteries, with Europe, Indonesia, and South Korea serving as key strategic locations. While the challenges are significant, these companies are poised to make a significant impact on the global battery industry.

Explore More

• Global Lithium Production Forecast to Reach 1.21 Million Tons LCE in 2023, US Lithium Producer ALB Leads with a 17% Market Share, Says TrendForce
• TrendForce: Global Li-ion Battery Industry Chain Market Supply and Demand Report in 2023

(Image and Source: Signing Ceremony between XTC and Orano – © Orano / Cyril Crespeau)

Several Chinese new energy vehicle manufacturers disclosed their delivery and sales data for September on Sunday, October 1. GAC Aion, in particular, reached a significant milestone by surpassing 50,000 in sales, while Li Auto Inc. experienced a remarkable 200% surge in deliveries.

…