Leading battery manufacturers are building factories in the United States

In 2021, the Biden administration in the United States proposed to invest $174 billion in the development of electric vehicles.

Among them, 15 billion US dollars are used for infrastructure, 45 billion US dollars are used for various vehicle subsidies, and 14 billion US dollars are used for some electric vehicle discounts.

In the following August, the Biden administration signed an executive order, which planned to reach 50% of the electrification rate of U.S. vehicles by 2030.

On the market side, traditional car companies and new energy car companies including Tesla, GM, Ford, Volkswagen, Daimler, Stellantis, Toyota, Honda, Rivian and others have put forward ambitious electrification strategies.

Some institutions speculate that according to the above-mentioned car companies’ electrification strategic goals, the sales of new electric vehicles in the US market alone are expected to reach 5.5 million by 2025, and the demand for power batteries may exceed 300GWh.

Global electrification strategic goals of major automakers in North America

Undoubtedly, the global mainstream car companies will focus on the North American market, and the demand for power batteries in this market will also increase in the next few years.

However, this market has not yet produced a local power battery company that can compete with mainstream Asian battery companies.

In the context of the accelerated explosion of automobile electrification in North America, leading power battery companies from China, Japan and South Korea have begun to intensively deploy the North American market this year.

Especially in 2022, Japanese and Korean battery companies, including LG New Energy, Panasonic Battery, SK on, Samsung SDI, etc., have made North America a key market for future investment.

Recently, Chinese companies such as CATL, Envision Power, and Guoxuan Hi-Tech have listed the construction of power battery factories in North America on their schedules.

North American market construction plan of major battery companies

According to reports, CATL has planned to invest 5 billion US dollars to build a power battery factory in North America, with a target production capacity of 80GWh, to support customers in the North American market such as Tesla.

At the same time, the factory will also meet the demand for lithium batteries in the North American energy storage market.

Last month, Ningde Times said in an agency survey that the company discussed various possible supply and cooperation plans with American customers, as well as the possibility of localized production.

“In addition, the company’s energy storage customers in the United States also hope to localize supply, and the company will comprehensively consider factors such as battery capacity, customer demand, and production costs to determine.”

At present, Japan and South Korea’s Panasonic Battery, LG New Energy, SK on and Samsung SDI are increasing their investment in North American factories, and have adopted the mode of cooperation with local American car companies. For Chinese-funded companies, if they have entered the Late will undoubtedly lose some of the advantages.

In addition to CATL, Guoxuan Hi-Tech has also reached cooperation with customers and intends to build factories in North America. In December last year, Guoxuan Hi-Tech received an order from a listed car company in the United States.

Guoxuan Hi-Tech will supply power batteries of no less than 200GWh to the American company in the next 6 years.

According to Guoxuan Hi-Tech, the two parties plan to localize the production and supply of lithium iron phosphate batteries in the United States, and jointly explore the possibility of establishing a joint venture in the future.

Unlike the previous two North American factories, which are still under consideration, Envision Power has determined to build a second power battery factory in the United States.

Recently, Envision Power has reached a cooperation with Mercedes-Benz. Envision Power will provide power battery products for Mercedes-Benz’s new generation of luxury pure electric SUV models EQS and EQE.

Envision Power stated that it will build a new digital zero-carbon power battery factory in the United States, which is planned to be mass-produced in 2025. It is reported that this will be the second battery factory built by Envision Power in the United States.

Based on the forecast of future demand for power and energy storage batteries, the planned battery production capacity in China’s local market has exceeded 3,000GWh, and local and foreign battery companies in Europe have also sprung up like mushrooms after a rain.

Relatively speaking, the North American market is still in the early stage of deployment. Only a few battery companies in Japan and South Korea have made active plans. In the next few years, it is expected that more from other regions, and even local battery companies will gradually land.

With the acceleration of electrification in the North American market by local American car companies and other car companies, the development of power and energy storage batteries in the North American market will also enter the fast lane.

At the same time, considering the characteristics of the North American auto market, it is expected that battery companies building factories in North America will exhibit the following characteristics.

Cooperation between battery companies and North American car companies will be the trend

Judging from the battery factories currently operating in North America, Panasonic and Tesla have jointly established factories, LG New Energy has jointly established factories with General Motors and Stellantis, and SK on has established a joint venture with Ford.

In the future, the second factory of Envision Power in North America is also expected to be mainly equipped with Mercedes-Benz. The North American factory of CATL is expected to be the main customer in the early stage. Tesla, and if Guoxuan Hi-Tech builds a factory in North America, the first factory is also expected to be It will mainly serve its contracted car companies.

The North American auto market is relatively mature, and the market share of major auto companies is relatively obvious, which poses a great challenge to other battery companies when building factories and cooperating with customers.

Looking at the current Asian battery manufacturers, they are mainly to finalize cooperative customers first, and then jointly build factories.

There are many factors to consider when choosing a factory location

Judging from the construction of factories that have been signed and implemented, LG New Energy, Panasonic Battery, SK on and Samsung SDI have chosen to build factories in the United States. The United States is a major market for North American automobiles.

However, considering the impact of worker training, efficiency, labor unions and other factors on quality and cost, battery companies that have not yet entered the North American market will also consider countries that are more competitive in terms of labor, factories and efficiency.

For example, CATL has previously revealed that it will consider building factories in Mexico first. “It is ideal to build factories in Mexico or Canada. It is still difficult to move China’s extreme manufacturing overseas.” Of course, the United States is also under consideration for the location of the new plant.

This year, the joint venture between LG New Energy and Stellantis in North America is located in Ontario, Canada. The power batteries produced by this joint venture plant will meet the battery needs of Stellantis Group’s vehicle plants in the United States, Canada and Mexico.

Lithium iron phosphate production line will be launched in large quantities

According to Battery China, the power battery production lines newly constructed in the North American market, including LG New Energy, Panasonic Battery, SK on, and Envision Power, are mainly based on high-nickel ternary batteries.

This is also the inheritance and iteration of overseas battery companies. The ternary route has continued.

However, with the participation of Chinese companies and the economic considerations of international car companies, the production capacity of lithium iron phosphate will gradually increase in the new battery projects in North America.

Previously, Tesla had considered introducing lithium iron phosphate batteries in North America. It is reported that the new North American factory of CATL mainly produces ternary batteries and lithium iron phosphate batteries, and Tesla is included in the customer list.

It is reported that Guoxuan Hi-Tech’s orders from a listed car company in the United States are also orders for lithium iron phosphate batteries. In the future, its localized supply of power products is expected to be mainly lithium iron phosphate batteries.

Car companies, including major players in the North American market such as Tesla, Ford, Volkswagen, Rivian, and Hyundai, are increasing the use of lithium iron phosphate batteries.

It is worth mentioning that in recent years, American energy storage projects have also begun to introduce lithium iron phosphate products from Chinese battery companies in large quantities.

The overall development of energy storage power stations in North America is relatively mature, and the demand for lithium iron phosphate batteries is growing rapidly, which has laid a good foundation for the future application of lithium iron phosphate batteries.