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Automotive Energy Supply targets EV makers with first China battery plant
Bloomberg | 2019/4/16

The battery maker for Nissan Motor Co.'s Leaf electric vehicle is adding a factory in China to more than triple global capacity and lure more customers in the world¡¯s biggest EV market.

Automotive Energy Supply Corp. began construction of the factory in Wuxi in China¡¯s eastern Jiangsu province this year with a planned annual capacity of 20 gigawatt-hours, enough to power 400,000 EVs a year, said Zhang Lei, CEO of Envision Group.

The Chinese renewable-energy company, which purchased a controlling stake in the battery business from Nissan, currently has three facilities in Japan, the U.S. and the U.K. that can produce a combined 7.5 gigawatt-hours of batteries for EVs a year.

¡°China has no shortage of EV battery makers, but it lacks one with products that people will feel absolutely safe to take their families around in,¡± Zhang said in an interview Sunday in Shanghai.

China aims to sell 7 million new-energy vehicles annually by 2025, including EVs, plug-in hybrids and fuel-cell vehicles. Automakers such as Tesla Inc., Volkswagen AG and Daimler AG are all teaming up with battery makers including Contemporary Amperex Technology Co. to secure supplies as they prepare to release more EVs.

Volkswagen wants to broaden its base of battery cell suppliers in China beyond CATL and is reviewing five companies to see whether they can meet quality and volume requirements for the multi-brand group.

"We are working with five battery cell suppliers qualifying them to group level. With one or two of them it may lead to more close cooperation. In China we have chosen to do this with Chinese players," Stephan Woellenstein, CEO of Volkswagen China passenger cars, said in Shanghai on Monday.

The push to broaden the company's supplier base reduces VW Group's dependency on CATL as its main supplier, Woellenstein said at the Shanghai Auto Show.

Volkswagen needs 160 Gigawatt hours of battery cell capacity as part of a mass production push into electric cars, Woellenstein said.

Zhang didn¡¯t provide an investment figure for AESC¡¯s latest factory, which is scheduled to begin output next year at the earliest.

While AESC tries to gain orders from other global carmakers, it will continue to supply Nissan¡¯s EVs, including the Leaf, which is a key reason that the Japanese automaker still holds a 20 percent stake, said Zhao Weijun, head of AESC¡¯s China business.

Reuters contributed to this report.

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