Yiwei Lithium is considering building the largest power battery factory in the UK

Interface News Reporter | Zhuang Jian

Chinese lithium battery companies have made new progress in their overseas layout.

On March 24th, according to media reports, Yiwei Lithium Energy (300014. SZ) is in talks to build a new power battery factory in the UK with an investment of at least £ 1.2 billion (approximately RMB 10.9 billion).

The factory is located in Coventry, UK, with an initial annual production capacity of 20 GWh, and the future production capacity is expected to expand to 60 GWh. If calculated based on each new energy vehicle carrying 50 KWh of electricity (50 kWh), a 60 GWh power battery can support over 1.2 million new energy vehicles. At that time, the production capacity of the production base will be about twice that of Far East Power's Sunderland battery factory in the UK, making it the largest power battery factory in the country.

The negotiations related to the construction of Yiwei Lithium's factory in the UK have entered the final stage, and it is expected that the relevant agreement may be signed within a few weeks.

As of the time of publication, Yiwei Lithium had not responded to an interview with Interface News regarding the construction of its factory in the UK.

According to incomplete statistics from Interface News, Chinese battery companies have 22 overseas projects, more than half of which are located in Europe. Seven of the top ten domestic power battery companies have announced plans to establish factories in Europe. Ningde Times (300750. SZ) and Guoxuan High Tech (002074. SZ), which started earlier, have respectively achieved mass production in German battery factories.

According to statistics released by South Korean research firm SNE Research, the global installed capacity of power batteries at Yewei Lithium Energy was 16.2 GWh last year, ranking ninth in the world. Ningde Times and BYD (002594. SZ) rank in the top two respectively.

Last year, the installed capacity of power batteries at Yiwei Lithium Energy increased by 129.8% year-on-year, making it the fastest among the top ten companies in terms of installed capacity growth.

If the UK factory lands, it will be the fourth overseas production base laid out by Yiwei Lithium Energy. The company has disclosed plans to establish battery manufacturing plants in Hungary, Malaysia, and the United States.

Yiwei Lithium announced the Hungarian factory project in 2022, which will invest nearly 10 billion yuan to build a new factory and supply large cylindrical batteries to BMW Group. The factory has already begun construction.

The Malaysian factory mainly produces small cylindrical batteries for electric tools and electric two wheeled vehicles. The project was announced to the public last year and is expected to start production by the end of this year.

Cylindrical batteries are one of the packaging forms of batteries, which can be divided into two categories based on size: small cylindrical and large cylindrical. The former is a mature product, while the latter has just been introduced to the market.

The US factory project also announced last year that it will adopt a joint venture model, with partners including Daimler Trucks, Parka, and Cummins. Among them, Daimler Trucks and Parka are both the world's four largest truck manufacturers, while Cummins is a well-known American power equipment manufacturer.

The joint venture factory will produce lithium iron phosphate batteries with an investment of 2-3 billion US dollars (approximately 14.6-22 billion RMB) and an annual production capacity of 21 GWh. According to the differentiation of positive electrode materials for lithium batteries, lithium batteries mainly include two categories: lithium iron phosphate and ternary.

The joint venture company will obtain a license for the development, manufacturing, and commercialization of battery products from Yiwei Lithium Energy, and pay licensing fees as agreed. The batteries produced by it will mainly be used in the designated North American commercial vehicle field. Three foreign companies and their affiliates will become the main customers, purchasing the vast majority of the factory's products.

Last year, the net profit of Yiwei Lithium reached 4.03 billion to 4.21 billion yuan, a year-on-year increase of 15% -20%, setting a new historical high.

Yiwei Lithium Energy stated that under the premise of a significant year-on-year decline in investment income and continuous increase in research and development investment, as new factories and production lines enter the mass production stage, last year's shipment scale grew rapidly, resulting in a positive year-on-year growth in annual performance.

Yiwei Lithium has not yet released its annual revenue data. In the first three quarters of last year, the company's revenue was 35.5 billion yuan, which is close to the full year level of 2022.

At the China Electric Vehicle Hundred People Conference held in mid month, Liu Jincheng, Chairman of Yiwei Lithium Energy, received widespread attention for his views on the industry landscape.

He analyzed that in the field of power batteries, the two strong positions of CATL and BYD are very significant and already have considerable profitability. If second tier enterprises only compete in price wars, they actually have no future.

Liu Jincheng believes that according to the current market pattern, second tier enterprises should return to the essence of the industry and improve their technology and quality levels. In this way, before the iteration of power battery technologies such as all solid state batteries in the future, we can continue to ensure our position in the industry and have sufficient funds to support the research and development of new technologies.

All solid state batteries are widely recognized as one of the preferred solutions for the next generation of power batteries. Compared with traditional liquid state batteries, all solid state batteries have abandoned liquid electrolytes and instead adopted solid electrolyte materials. This difference gives it high safety, high energy density, high power, and temperature adaptability, but it still faces many technical challenges and commercialization issues.