Foreign media: How China Leads the World Far Behind in the Battery Competition

On October 13th, in a new book titled "Climate Capitalism," Bloomberg journalist Akshat Rathi explains the reasons why China dominates the battery market from the perspective of the world's largest battery company, Ningde Times& Nbsp;The following is the translated text:In July 2018, Zeng Yuqun, the CEO of Ningde Times, the world's largest battery company, signed an agreement with Wolfgang Tiefenseee, the German minister of Thuringia, promising the Chinese manufacturing giant to establish its first large electric vehicle battery factory in Germany. Time is like a fleeting moment, and few present at that time realized the significant historical significance of this moment

On October 13th, in a new book titled "Climate Capitalism," Bloomberg journalist Akshat Rathi explains the reasons why China dominates the battery market from the perspective of the world's largest battery company, Ningde Times& Nbsp;

The following is the translated text:

In July 2018, Zeng Yuqun, the CEO of Ningde Times, the world's largest battery company, signed an agreement with Wolfgang Tiefenseee, the German minister of Thuringia, promising the Chinese manufacturing giant to establish its first large electric vehicle battery factory in Germany. Time is like a fleeting moment, and few present at that time realized the significant historical significance of this moment.

Germany is known as the hometown of the automotive industry for good reason. In 1879, Karl Benz built and operated the first internal combustion engine used to drive cars here. Nowadays, Germany is the headquarters of Volkswagen, one of the world's largest car companies, and the hometown of BMW, Audi, Mercedes Benz, and Porsche, all of which are renowned worldwide for their excellent quality. It is estimated that the automotive industry accounts for one seventh of German employment, one fifth of exports, and one-third of research spending.

The signing of this agreement means that the automotive industry, which is the backbone of Germany's economy, has finally failed. Not because it cannot produce the cars people want, but because it has not developed a key technology, namely lithium-ion batteries, which are providing power for cars in the 21st century. When countries finally began to make serious efforts to catch up, China had already taken an absolute leading position. According to Bloomberg estimates, by 2025, China's battery production capacity will be three times that of the rest of the world combined.

It is not only Europeans who have missed the opportunity. Even in the late 1990s or early 2000s, few people believed that batteries could play such a significant role at such low costs. Now, China has emerged as a global leader in lithium-ion batteries, which has made the oil industry, Americans, and Japanese feel regretful. Among them, the petroleum industry invented lithium-ion batteries, Americans commercialized this technology, and the Japanese were the first to promote this technology on a large scale. In view of this, I (Lati) went to China and wanted to know how this happened.

When I walked into the office of Huang Shilin, Vice Chairman of Ningde Times, located on the 20th floor, the first thing I noticed was the scenery. This is a gray afternoon in November 2018, with thick fog covering the mountains in front of us, revealing a bay leading to the East China Sea. Huang Shilin was once the second in command of the Ningde era and one of the wealthiest people in China. He and I are both amazed by the scenery here, but I really want to ask him some questions. He handed me a cup of hot water and we talked about batteries, an invention that has a history of 200 years.

Technically speaking, a battery is a device that converts chemical energy into electrical energy. In 1799, Italian chemist Alessandro Volta first invented the battery, but it was not until 60 years after the birth of lead-acid chemistry that the battery was put into practical use. By the end of the 19th century, lead-acid batteries were widely used, including providing power for early cars, although the time was quite brief. The chemical composition of batteries cannot compare with the distance that cars burning fossil fuels can travel, and the rebirth of electric vehicles must wait until the invention of lithium-ion batteries.

During the oil crisis of the 1970s, large fossil fuel companies discovered that oil was a commodity with limited reserves, so they doubled their efforts to find alternatives. Stanley Whittingham, a chemist at American oil giant Exxon, led a project to invent the world's first rechargeable lithium-ion battery: one electrode (cathode) used titanium sulfide, and the anode was made of lithium metal. But there is still a major issue that needs to be addressed, which is the battery constantly catching fire.

Before Whittingham could take any action on this, the 1980s passed and the situation of oil oversupply returned, weakening ExxonMobil's interest in finding alternative energy sources. Fortunately, Whittingham's work has sparked a broader interest in the field. In the next decade, lithium-ion batteries have become an important scientific research topic around the world. Three researchers conducted in-depth research to turn Whittingham's invention into a viable commercial product, and thus won the 2019 Nobel Prize in Chemistry.

In 1992, Sony became the first company to commercialize lithium-ion batteries as an optional upgrade configuration for digital camera Handycam. Others quickly seized the opportunity for Sony's success, including Zeng Yuqun. In 1999, at the age of 31, Zeng Yuqun founded Amperex Technology Limited (ATL). Within two years, the company provided lithium-ion batteries for 1 million devices and became a reliable supplier. In 2005, ATL was acquired by Japanese company TDK.

Zeng Yuqun and Huang Shilin have decided to continue their positions after the acquisition is completed. TDK added Japanese elements to the manufacturing process of ATL and developed its lithium-ion battery business into the latest "cash cow", starting to enter the smartphone market. Soon, ATL began providing batteries for Samsung and Apple.

As early as 2006, Huang Shilin began to address the issue of using its batteries in electric vehicles. The earliest request came from the Indian company Reva. At that time, the company was producing the G-Wiz, a two seater electric vehicle powered by improved lead-acid batteries, with a top speed of 40 kilometers per hour and a range of 80 kilometers, only supporting slow charging. Lithium ion batteries will increase the speed and range of Reva cars, and enable faster charging. In order to develop solutions, Zeng Yuqun and Huang Shilin established a research department within ATL and began obtaining technology licenses from the United States, allowing them to conduct in-depth development on the basis of existing research.

At that time, few Chinese companies purchased licenses or invested millions of dollars in early automotive battery research in this way. But with its strong research capabilities, ATL broke this pattern and laid the foundation for China to dominate one of the most important manufacturing fields in the 21st century.

By 2008, ATL's efforts had already borne fruit. That year, a demonstration fleet of electric buses was launched at the Beijing Olympics, some of which were powered by ATL batteries. Zeng Yuqun and Huang Shilin noticed the opportunity. In 2011, they founded the derivative company CATL, where "C" represents contemporary, indicating their belief that the future of batteries lies in the automotive industry.

Around the same time, China introduced subsidies for electric vehicles in order to utilize next-generation technology. The condition is that the battery must be locally manufactured to meet the conditions. At that time, BMW, which hoped to expand its business in China, decided to collaborate with Chinese automakers Brilliance and Ningde Times. In 2013, BMW Brilliance launched the All Electric Vehicle Promise for the Chinese market. It is based on the design of the BMW X1 and uses batteries from the Ningde era.

Unlike AA batteries (No. 5 batteries), batteries produced by whoever are essentially the same, while electric vehicle batteries typically need to be customized for different vehicle models to adapt to the vehicle body in the best possible way. This means that engineers from car manufacturers need to collaborate with engineers from battery companies to exchange ideas, standards, and processes. In the process of cooperating with BMW, Ningde Times has added some German engineering technologies, such as paying attention to details and improving the reliability of factory products.

Zeng Yuqun said at the 2017 Zhinuo celebration, "We have learned a lot from BMW and now we have become one of the top battery manufacturers in the world. BMW's high standards and requirements have helped us achieve rapid growth." In 2019, Ningde Times broke ground on its first car battery factory in Germany to seize the opportunity in the automotive industry. Nowadays, the Ningde era also has factories in Hungary and plans to establish new factories in the United States and Mexico. Ningde Times provides batteries to all electric vehicle manufacturers, including Tesla. (Small)