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.

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

Along with the swift development of the Chinese new energy vehicle (NEV) industry, the number of retired power batteries has risen year over year with Chinese waste power battery volume estimated to exceed 18GWh in 2021 and reach 91GWh by 2025, according to TrendForce’s latest investigations. Currently, power battery recycle and reuse is primarily divided into echelon utilization and material recycling. Chinese waste battery material recycling already possesses a certain scale with a 2020 market size of RMB2.4 billion and it is estimated to reach RMB26 billion by 2025.

TrendForce adds, the current Chinese Ministry of Industry and Information has officially announced the “14th 5-Year Industrial Green Development Plan,” expressing a wish to promote a transformation in resource utilization. In terms of the recycling and reuse of waste power batteries, it proposes a comprehensive set of laws and regulations for power battery recycling, exploring and promoting new business models such as “internet + recycling,” strengthening traceability management, encouraging upstream and downstream enterprises in the industrial chain to build shared recycling pipelines, and establishing a set of centralized recycling service stations. In addition, scaled echelon utilization in fields such as waste power battery energy storage, backup, charging, and exchange will be promoted to establish a set of echelon utilization and recycling projects and build a more complete power battery recycling structure by 2025.

Power battery recycling and reuse include echelon utilization and materials recycling. In echelon utilization, power batteries with charge capacities that have dropped to 80% or less are used in applications such as power backup, energy storage, or other related fields. Currently, most examples of echelon utilization are at an experimental demonstration stage. In materials recycling, retired power batteries are dissembled, valuable metals such as lithium, cobalt, and nickel recycled, and reused in the recycled manufacturing of battery materials (e.g. ternary precursors).

TrendForce believes the development of NEVs is an important avenue in the promotion of energy conservation. The rapid development the industry will inevitably be accompanied by the large-scale retirement of power batteries in the future and bring industry opportunities for power battery recycling and downstream echelon utilization. Currently, the battery recycling business still faces a number of bottlenecks such as the fragmentation of power battery life cycle information, a lack of testing standards for retired batteries, improvement of technical standards for echelon utilization, and fluctuations in metal pricing affecting the economics of material recycling. These are all factors that restrict the recycling and reuse of power batteries. China’s new battery recycling policy will promote the orderly and healthy development of the lithium battery industry in the future and help break through the constraints of lithium and other key global resources.

For more information on reports and market data from TrendForce’s Department of Green Energy Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com