Ganfeng Lithium, one of China’s fastest growing companies, is expanding into battery production as it seeks to prepare for the expected rapid growth in the country’s electric car market.
The Chinese company, which is valued at $5.3bn after a 600 per cent increase in its share price over the past five years, will start shipping batteries to electric buses in August and to the car industry next year.
The move comes as the stakes rise in the electric vehicle or EV market, with Volvo Cars this week announcing all its models from 2019 will have an electric motor, while Tesla Motors plans to deliver its first mass market Model 3s this month.
“At the moment there’s a shortage of good quality batteries in the market,” Wang Xiaoshen, vice-chairman of the Shenzhen-listed company, told the Financial Times. “We are the leading supplier of lithium chemicals which will benefit our battery plant.”
Companies such as Ganfeng are vital to help the electric car market properly take off. It is the world’s largest supplier of lithium to the electric car industry in China and overseas, including to groups such as Tesla. Lithium is one of the key elements in batteries that power electric cars.
The group is aiming to become an integrated battery and lithium company by buying overseas lithium projects while expanding research in next generation battery technology.
The Chinese government is pushing its companies to become dominant in the electric vehicle supply chain, as part of its industrial policy known as Made in China 2025, to create national champions.
China is already the world’s biggest electric car market and is targeting 7m so-called new energy vehicles by 2025.
Ganfeng’s battery effort is focused on advancing the technology rather than just production scale, Mr Wang said.
The company is researching next generation solid state batteries, which use lithium metal for the anode as well as in the cathode of the battery unlike conventional lithium-ion batteries that use lithium salts.
Solid state batteries have higher energy density, and therefore greater driving range, but will still require several years to develop, Mr Wang said.
“We think in the future if you want to increase energy density you have to use the lithium metal in the battery,” he said. “It’s already had a significant improvement compared to current technologies.”
Ganfeng has been the most acquisitive Chinese lithium companies. This year it acquired a 17 per cent stake in miner Lithium Americas, whose CauchariOlaroz project in Argentina is set to start production in 2019.
It also bought a 5 per cent stake in Perth-based producer Pilbara Minerals, signing an agreement for a 10-year supply from the company.
Ganfeng also owns a 43 per cent stake in Australia’s Mt Marion lithium project, which is set to produce for the car industry after quality testing, according to Mr Wang.
The company is evaluating buying into more overseas lithium projects to secure supply, Mr Wang said.
“Our strategy is to secure long-term competitive resources,” he said. “Our target is to have significant scale. We should be prepared, the EV is coming, we don’t know how fast it will be.”
Source: Financial Times
