Chinese battery manufacturer Gotion Hi-Tech Co. Ltd. announced on December 20 that its overseas sub-subsidiary Gotion Inc. has entered into a “strategic supply and localization agreement” with an undisclosed carmaker based in the US. Under the agreement, Gotion will be the carmaker’s strategic supply partner for LFP batteries.
According to the announcement, Gotion will be exporting LFP batteries that are manufactured at its facilities in China to meet the carmaker’s demand. On the other hand, both sides are planning to set up battery production capacity in the US. There will also be discussions on the possibility of establishing a joint venture. The name of the carmaker has been kept confidential for the reason of protecting trade secrets. Apart from working with this carmaker, Gotion is also looking for opportunities to sell LFP batteries to other electric car manufacturers as well as customers in other application segments and around the world.
Looking at the terms of the agreement, Gotion will be shipping LFP batteries in quantities requested by the undisclosed carmaker during the 2023-2028 period. The minimum total procurement quantity is set at 200GWh. Additionally, Gotion has agreed to further negotiate with the carmaker so as to allocate a portion of its existing production capacity in China or set up new production capacity in the US for meeting the carmaker’s demand.
Gotion Hi-Tech said that the inking of this agreement will establish a stable, long-term strategic relations with the said carmaker. Through the partnership, Gotion Hi-Tech will be able to increase the scales of its business operations, enhance its profitability, and capture more global market share. Furthermore, the deal will help accelerate Gotion Hi-Tech’s internationalization process and thereby consolidate its leading position in the battery industry.
Established in 1995 and listed in the Shenzhen Stock Exchange in 2015, Gotion High-Tech is among the earliest Chinese companies to pursue the independent development, manufacturing, and sales of lithium batteries for new energy vehicles. The core businesses of the company include in-house development and production of new types of lithium batteries, energy storage solutions, and advanced materials for electronics. After many years of hard work, the company has secured a portfolio of patented key technologies and emerged as one of the leading providers for lithium batteries in China.
Chinese news websites have reported that Gotion High-Tech held a major conference in the Chinese city of Hefei on December 17 to announce its plans for 2022. Wang Qiang, president of Gotion High-Tech, said that the company’s total production capacity has risen by 74% from 2020. The company has also made significant improvement in terms of order fulfillment. The market value of the company has exceeded RMB 100 billion thanks to these impressive performance results.
Regarding future strategy, Gotion High-Tech will be expanding its presence in the four main application segments of electric cars, energy storage, specialty batteries, and battery recycling during 2022. Turning to production capacity, Wang said that Gotion High-Tech currently has 10 production sites. From this basis, the company will undertake expansions at its existing facilities or build new facilities. The year-end target for 2022 is to reach 100GWh per year for available production capacity and more than 50GWh per year for operating production capacity.
Tsai Yi, head of R&D at Gotion High-Tech, was at the conference and reported that the high-density lithium battery cell (i.e., 300Wh/kg) developed by the company has been adopted for vehicles in production. Moreover, breakthroughs have been achieved in the development of the 230Wh/kg LFP battery cell and the 110Ah semi-solid-state battery cell. Tsai added that for next year, Gotion High-Tech will continue to concentrate on advanced materials, battery cells, and forward-looking technologies. The company will also optimize product engineering designs and devise new offerings for energy storage. The R&D focus for battery products will be on the 260Wh/kg LFP battery cell and the 400Wh/kg ternary battery cell.
Chinese news websites and other automotive news websites have reported that the Volkswagen China Group (VGC) have become the majority stakeholder of Gotion High-Tech through an acquisition of 384 million shares under a private placement on December 15. Hence, the Chinese battery manufacturer will likely be a supply partner to Volkswagen in addition to the undisclosed American carmaker.