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.