119.5 billion battery project comes to fruition!

It is increasingly becoming an obvious trend for global automobile manufacturers to accelerate and expand their investment in power batteries . Recently, Toyota, Hyundai, Tata and other automobile giants from Japan, South Korea and India have announced plans for battery factories

Toyota invests additional US$2.1 billion

On June 1, Toyota announced that in order to promote the electrification process, it will assemble a new three-row pure electric SUV at Toyota's Georgetown, Ky. plant (Georgetown, Ky.) starting in 2025. This is also the first time Toyota has assembled a pure electric vehicle in the United States , but Toyota has not announced details of the new model.

The SUV will be supplied from Toyota's new battery plant in North Carolina. The new facility is currently under construction and will receive an additional $2.1 billion in investment to support the company's journey to carbon neutrality.

It is reported that the factory will have six battery production lines, of which four will produce batteries for hybrid vehicles and the other two will produce batteries for electric vehicles. With the announcement of the new investment, Toyota's total investment in North Carolina has risen to $5.9 billion.

According to previous information, the plant will be operated by Prime Planet Energy & Solutions, Inc., a joint venture jointly created by Toyota and Panasonic. The company began formal operations last year, in which Toyota holds 51% and Panasonic holds 49%. Last month, it also reached a long-term supply agreement with Zhuhai Enjie. The latter will supply PPES with a total amount of approximately It is a lithium battery isolation film product worth 2.590 billion yuan (excluding tax) .

It is worth noting that on May 6 this year, according to foreign media reports, LG Energy Solutions is negotiating with Toyota Motor on the supply of batteries in the United States, and is expected to finalize battery supply cooperation.

Currently, Toyota is accelerating its electrification transformation. Toyota's pure electric vehicle sales in 2022 will be 24,466 units; in the first quarter of this year, pure electric vehicle sales were 17,473 units. According to the plan, Toyota plans to introduce 30 pure electric models by 2030 , with annual global sales reaching 3.5 million vehicles.

Correspondingly, Toyota's goal is to ensure battery production capacity of 280GWh by 2030. Currently, the battery suppliers of Toyota and its subsidiaries include Panasonic, BYD , and CATL. The self-built battery factory and the possible supply cooperation with LG Energy Solutions are Toyota's measures to accelerate the construction of a diversified supply system. From this point of view, other manufacturers may enter Toyota's battery supply chain in the future, or expand the scope of cooperation with existing suppliers.

Hyundai Motor invests $9.3 billion to build two U.S. battery plants

In April and May, Hyundai Motor announced the establishment of two battery factories in the United States.

On April 25, Hyundai Motor Group announced that it will build an electric vehicle battery factory with SK On in Bartow County, Georgia, USA, with a total investment of approximately US$5 billion. It is expected to start producing battery cells in the second half of 2025, with an annual production capacity of 35GWh. The plant will be operated by a newly established joint venture between Hyundai and SK On, with each party holding a 50% stake.

On May 26, Hyundai Motor once again announced that it will build a battery factory with LG Energy Solutions (LGES) in Bryan County, Georgia, with an annual production capacity of 30GWh and an investment of more than US$4.3 billion.

The factory will also set up a new joint venture to be responsible for its implementation and operation, with each party holding 50% of the shares. It plans to start construction in the second half of 2023 and put into production batteries as early as the end of 2025.

At this point, Hyundai Motor will build two battery factories through cooperation with SK On and LGES, with a total investment of US$9.3 billion. Both factories are located near Hyundai Motor's Metaplant America plant in Savannah, Georgia. They will serve as battery cell factories. Hyundai Mobis, a subsidiary of Hyundai Motor Group, will be responsible for assembling battery packs for the production of Hyundai Motors. , Kia and Genesis EV models.

Hyundai Metaplant America officially started construction in October 2022 and is currently under construction. It is expected to start commercial production in the first half of 2025, and the planned start-up time of the two battery factories also matches this.

SK On currently has five factories in the United States, including three factories in cooperation with Ford Motor and two factories in Georgia. Together with the joint venture factory with Hyundai, the annual production capacity in the United States alone has exceeded 185GWh.

LGES plans to set up 7 production bases in North America, and currently has 6 battery factories in place, including 3 jointly built with General Motors, 1 jointly built with Honda Motor, and 1 jointly built with Stellantis NV. factory. Through the joint venture factory with Hyundai, LGES will achieve its plan to have seven production bases in North America.

Tata will invest US$1.58 billion to build battery factory

According to foreign media reports, on June 2, Agratas Energy Storage Solutions, a subsidiary of the Indian Tata Group, signed a memorandum of understanding with the government of Gujarat in western India to build a lithium battery factory with an investment of approximately 130 billion rupees. ($1.58 billion). The new plant will be located in Sanand, in the northern state of Gujarat. Construction is expected to begin within the next three years and will initially have an annual production capacity of 20 GWh, but its capacity will likely be doubled after the second phase of expansion is completed.

Data show that Tata Group is the largest group company in India. Its business scope includes communications and information technology, engineering, materials , services, energy, consumer products and chemical products. Tata Motors is an important business part and it is also India's largest car company.

In 2008, Tata Motors acquired the Jaguar Land Rover brand from Ford Motor Company. Jaguar Land Rover is headquartered in the UK. At the end of May this year, the British BBC reported that Tata Motors will build an electric vehicle battery factory in the Gravity Business Park in Somerset, UK.

It is said that Tata Motors had previously considered building a new factory in the UK or Spain, but ultimately chose the UK after weighing government subsidies and financial incentives.

If the battery factory plans in India and Europe are successfully implemented, Tata's battery supply chain control will be further improved.

In addition, Weike Lithium Battery noted that in 2019, Tata Motors also signed a joint venture agreement with Hefei Guoxuan, a wholly-owned subsidiary of Guoxuan Hi-Tech . The two parties plan to jointly invest in a joint venture in India, with a total investment of 100 million rupees. Hefei Guoxuan and Tata Motors hold 40% and 60% of the equity of the joint venture respectively.

The main business of the joint venture includes the design, development, verification and manufacturing of battery modules and battery packs, as well as battery management systems, which are mainly provided to various types of passenger cars and commercial vehicles in the region .

Summarize

Both Toyota and Hyundai Motor are actively increasing their investment in power batteries in the United States. Behind the scenes, the U.S. government’s Inflation Reduction Act is increasingly showing strong appeal, which may lead to the entire new energy vehicle industry for a period of time. Industrial chains are rapidly gathering in North America, forming distinct regional characteristics.

Data shows that since the bill was passed in August last year, automakers and suppliers have announced investments of more than $50 billion in electric vehicles and batteries in North America.

As for Tata, its plans for a battery factory in India are part of India's efforts to build a local electric vehicle supply chain. The Indian government is determined to transform into electric vehicles. The goal is to convert 100% of the country's two-wheeled and three-wheeled vehicles to electric vehicles by 2030, and at the same time increase the sales proportion of electric vehicles to 30%.

As for the British battery factory plan, perhaps the biggest attraction is the subsidies behind it. The British government currently plans to make the UK more attractive to car manufacturers and focus on developing local battery manufacturing capabilities. But currently, the UK has failed to attract significant battery investment, except for a large battery facility set up by China Envision Group. And major carmakers including Stellantis and Ford warned last month that they might not be able to continue operating factories in the UK due to post-Brexit trade rules that are about to take effect.

Looking across Europe, Volkswagen has suspended its European battery plant plans and settled in St. Thomas, Canada, due to factors such as subsidy policies, energy prices and supply chain risks.

From this point of view, favorable factors such as policy subsidies are becoming key weights for investment in new energy industry companies.