Fireside Chat – A Review of China's EV Battery Landscape by Bingyao Chen

We will discuss about ev batteries and talk about the state of play for this sector and the key issues and trends that we should take. Note of im sure were all aware: electric vehicles theyre a cleaner and more environmentally friendly alternative to traditional ice vehicles, mainly due to emitting less carbon emissions because they are powered by electricity as opposed to fossil fuels, also because they have no tailpipe emissions. So really helping with reducing roadside air pollution and when we look at the battery which stores electricity to power the vehicle, its a very important component of an eevee, so bing yao to start off. This discussion lets look at china, the worlds largest ev market. Not only does it account for almost half of global ev sales, but it also has top market share in ev batteries. So how – and why has china become the global hub for ev batteries? China has spent hundreds of billions of r b subsidies to encourage private enterprises to develop ebay and uv battery supply chain for many years. It is important at the very beginning of our emerging industry to protect the domestic players from global competition. China ultimately mastered know how in battery production, thanks to the great cheap talent pool and years of accumulations on technologies. In addition, the good endowment in raw materials and labels also help them with the costly, but then what about the battery equipment side? How is china so good and what are chinas strength when it comes to making batteries well, looking at the cost structure of equipment, the raw materials cost engineer and manufacturing labels cost as a main determinant.

China is leading in these aspects. Industry cluster with eva battery maker also helps chinese battery equipment makers. They are able to respond to and get feedback from the battery makers faster than global peers. So, as i understand lithium ion batteries, theyre the most commonly used type of batteries for evs and they use liquid or gel electrolytes to generate electricity. But then recent years theres been the emergence of solid state batteries and to use these type of batteries for evs. What do you think of this type of technology? Is it a disruption for the sector and how is it going to impact chinese battery makers, solid state battery, largely increase the energy density with better safety properties? However, it is still far from massive production for cost issues. Chinese battery manufacturers, they have been working under solid state battery r d for a long while they are about to launch some semi solid state products in the coming two to three years by collaborating with local oems. When you look at global automakers like volkswagen, they have ambitious plans to build a battery facility in europe. What do you think about this plan? Is it going to affect chinas position in the global ev battery market? China is one of the largest auto market in the world, citing the lessons and experiences in traditional ice markets. China has always been seeking a position in auto supply chain um. Well, they will never give up easily. China also has some cost advantages in some part of ebay production due to the cheap raw materials, power and level, so, for example, in the annual part, so its not that easy for the european oems to totally replace chinese battery manufacturers.

In addition to some external chinese leading battery producers, they are technologically ahead of global peers, so its costly for new entrants to break in the industry cluster. Well, not just europe, but also the us, so the us they want to make their own ev supply chain. Whats. Your view on this u.s is also one of the largest auto market. They do have incentives to build up their own supply chain, just as what they have done before in the ic times. However, the u.s oems, they are not that active in the eva product strategies. Other than tesla, even for tesla, they outsource most of the parts for battery. It is a long value chain and it takes huge amount of time and money to see the results. What about the cost differences of manufacturing say between europe and the united states? And if you compare that with china, so if the cost of manufacturing ev batteries is too high in europe, would then china be good and well positioned to be an ev export hub? Well, we can save from ctl and lg cam. They are adding capacities in europe. Now it takes time to say the production cost, the differences between europe and the us. But yes, if the cost of manufacturing even battery is too high in europe, china is likely the export hub. But then what about korea, korea and china? They seem to compete head to head in the ev battery world. What are the advantages of each of these markets? Korea has a longer time of exposure to lithium battery production in china.

Therefore, we say the leading korean battery makers, like lg chem, samsungs bi, asking innovation. They are more technology leading, especially in high nickel cattle materials. Well, china is a cost leader in raw materials manufacturing levels. We witness chinese players fast catch up in the last decade. In addition, china is a big market. It is easier for them to cultivate big companies. As long as it gets no help, then who would you say, are the leaders and will be the leaders in in china? Well, ctl is definitely one of the leaders in china. It is challenging for the new entrants or small players to surpass in other parts along ebay supply chain. We also see some sub industry leaders, for example, can phone lithium as one of the leading lithium mining and refining producer. Thanks for that so to wrap up this discussion, perhaps we can end with an esg question so along the ev supply chain, which parts of the supply chain is most exposed to esg risks, and how have you seen companies address these risks well, upstream of the ebay Supply chain like mining and smelting is more exposed to the environmental risk most of companies related. They have realized the issues and invested a lot to improve. Thank you very much for your time with us today, bing yao sounds like a very promising outlook for ev batteries, especially in the asia region, with a lot of development and good market leaders in china and korea, especially also considering the key part evs has to play To decarbonize the economy, especially in the transport sector, so on that note, thank you again bingham for your insightful sharing and we look forward to sharing more insights in future videos.