Chinese battery maker plans to build first factory in Europe

A man walks past a sign of SVOLT Energy Technology Co in Baoding, Hebei province, China July 9 2019. (Reuters)
Updated 09 July 2019
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Chinese battery maker plans to build first factory in Europe

  • "The global plan is to reach a capacity of 100 GWh by 2025"

BAODING, BEIJING: A Chinese battery maker carved out of the country's biggest sport utility vehicle manufacturer, Great Wall Motor Co Ltd, on Tuesday said it is planning its first overseas manufacturing base in Europe.
SVOLT Energy Technology Co Ltd, which became independent in 2018, also said it is making "good progress" on developing a cobalt-free lithium-ion battery - a goal of battery producers aiming to eliminate the pricey and increasingly scarce mineral.
"We plan to have five production bases worldwide, including in the United States, but it will take time," said SVOLT general manager Yang Hongxin at an event in the Chinese city of Baoding. "The global plan is to reach a capacity of 100 GWh by 2025."
The move comes as Asian battery makers deepen cooperation with automakers in Europe, where limited means of making the cells that power electric vehicles has raised concern of over-reliance on Asian manufacturers.
Chinese battery maker Contemporary Amperex Technology Co Ltd (CATL) is building a 14 GWh production site in Germany and will supply batteries to local automaker BMW AG .
CATL was identified as a strategic partner by Volkswagen AG when the German automaker said it will buy 50 billion euros ($56.05 billion) worth of cells. Volkswagen also named South Korea's SK Innovation Co Ltd, LG Chem Ltd and Samsung SDI Co Ltd, as well as Sweden's Northvolt AB.
SVOLT plans to build a base in an as yet undecided European country, featuring a research centre and factories for battery materials, cells and modules with initial capacity of 20 GWh, its general manager, Yang told Reuters in an interview.
Investment will be around 2 billion euros ($2.24 billion), Yang said. As part of that, SVOLT aims to seek about 1 billion yuan ($145.34 million) in its next fundraising round this year. It will raise more funds to support construction which begins in the second half of next year, with production starting in 2022.
Production capacity will be around 24 GWh by 2025, senior SVOLT official Cao Fubiao said in the interview. The plant's first customer will likely be Great Wall Motor, and SVOLT is in talks to supply "German and French car manufacturers," Cao said, declining to identify the automakers.
Great Wall has previously said it would form a new-energy vehicle joint venture with BMW.
The European plant would add to SVOLT's first factory under construction in Changzhou, Jiangsu province. The Chinese plant will have initial capacity of 12 GWh, and will eventually exceed 70 GWh. ($1 = 0.8921 euros) ($1 = 6.8803 Chinese yuan renminbi)


BMW picks insider Zipse as CEO to catch up with rivals

Oliver Zipse
Updated 19 July 2019
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BMW picks insider Zipse as CEO to catch up with rivals

  • German giant has lost ground to Mercedes-Benz and Tesla as tech steps up

FRANKFURT: BMW has named Oliver Zipse as its new CEO, continuing the German carmaker’s tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services.
Hailing Zipse’s “decisive” leadership style, BMW hopes the 55-year-old can help it win back its edge in electric cars and the premium market  from rival Mercedes-Benz.
But some analysts questioned whether Zipse was the right choice with new fields such as software and services like car-sharing becoming increasingly important.
“What is intriguing is the cultural bias to appoint the head of production. It works sometimes but ... being good at building cars is not a defining edge the way it was 20 years ago,” said Jefferies analyst Philippe Houchois.
Current CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all former production heads.
Zipse joined BMW as a trainee in 1991 and served as head of brand and product strategies and boss of BMW’s Oxford plant in England before joining the board.
He will become chief executive on Aug. 16, taking over from Krueger who said he would not be available for a second term.
“With Oliver Zipse, a decisive strategic and analytical leader will assume the Chair of the Board of Management of BMW. He will provide fresh momentum in shaping  the future,” said Reithofer.
Zipse helped expand BMW’s efficient production network in Hungary, China and the US, in a move that delivered industry-leading profit margins.
Under Krueger, BMW was overtaken in 2016 by Mercedes-Benz as the best-selling luxury car brand.
It also had an early lead over US  rival Tesla in electric cars, but scaled back ambitions after its i3 model failed to sell large numbers.
Reithofer initially championed Krueger’s low-key consensus-seeking leadership, but pressured him to roll out electric vehicles more aggressively, forcing Krueger to skip the Paris Motor Show in 2016 to reevaluate BMW’s electric strategy.
Krueger’s reluctance to push low-margin electric vehicles led to an exodus of talented electric vehicle experts, including Christian Senger, now Volkswagen’s (VW) board member responsible for software, and Audi’s Markus Duesmann, who is seen as a future CEO of the company.
Both were poached by VW CEO Herbert Diess, a former BMW board member responsible for research who was himself passed over for BMW’s top job in 2015.
VW has since pushed a radical 80 billion euro ($90 billion) electric car mass production strategy, and a sweeping alliance with Ford.

Other skills
“A CEO needs to have an idea for how mobility will evolve in the future. This goes far beyond optimising an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, and former BMW engineer. “He needs to build teams, attract talent, and promote a culture oriented along consumer electronics and internet dynamics.”
German manufacturers have dominated the high-performance market for decades, but analysts warn shifts towards sophisticated technology and software is opening the door to new challengers.
“Tesla has a lead of three to four years in areas like software and electronics. There is a risk that the Germans can’t catch up,” UBS analyst Patrick Hummel said.
Germany’s Auto Motor und Sport car magazine, normally quick to champion German manufacturers, this week ran a cover questioning BMW’s future.
“Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member said.