Professionals analyze that because the Nanjing plant cannot produce as
planned, the equipment is depreciated every day, and it also costs personnel and
maintenance costs. Volvo is a major customer of LG (the largest customer in
Europe), and now it has added Lynk & Co and London taxis. Customers, selling
to Geely is a quick knife to cut the mess to solve the vacancy problem of the
Nanjing factory, save or even expand the order in the Chinese market.
reported that LG Chem helped Hengyuan build a production line and
authorized the use and production of its battery technology. The batteries
produced in Hengyuan will also be used in Lynk & Co.
This also explains what Volvo Car President and CEO Hanken Samuelson said
at the Geneva Motor Show in March, "Our solution is to cooperate with Geely and
provide batteries produced locally in China according to Volvo battery
requirements. product."
"Automotive Business Review" asked Yu Ning, the vice president of Geely
Group in charge of overseas mergers and cooperation, but was declined. Only
admitted that he had been responsible for the business of international
companies such as LG, Volvo and Lynk & Co, and refused to disclose more
information.
But "Automobile Business Review" has been able to restore the basics of the
incident from some of the information it had previously and a large number of
public reports. This is a major event in the field of new energy vehicles in
China. Volvo is the first car manufacturer to solve the problem of domestic
battery production without switching the battery design.
From May 1, 2016, China’s policy requires that new energy vehicles that
receive subsidies must use battery companies listed in the “Automotive Power
Battery Industry Standards and Conditions” as their suppliers. As LG, Samsung
and other Korean batteries are not listed in the catalog, New energy products
using Korean batteries need to switch suppliers.
Volvo, SAIC, GM, Volkswagen and other companies all use Korean batteries.
Policy changes have made other companies choose to switch suppliers. Coupled
with development and verification work, the development cycle of many car
companies' new energy products has been extended. The relevant personnel of SAIC
Motor once said, "It will take at least one year to replace the existing
battery. If the upgrade of the product is added, a two-year transition period
will be required."
South Korean battery companies that have established factories in China
such as Samsung SDI, SK, and LG have been more affected, and have successively
reduced production or even shut down.
It was learned from different channels that Geely subsequently opened
negotiations with LG Chem. In April 2017, the two parties completed the signing
of the contract at the Shanghai Auto Show. Geely wholly acquired the right to
use all production equipment and manufacturing technology intellectual property
rights of the LG Nanjing plant. The two parties also established In the
follow-up cooperation, LG will help Geely Group's high-end brands (including
Volvo) continue to upgrade battery technology.
The plant has a production capacity of 1GWh, which can supply battery
requirements for 80,000 hybrid vehicles. Someone inside Hengyuan once said,
"This production line has more than 2,000 patents, and China's best battery
manufacturing technology is now Geely Hengyuan!"
Vehicle power batteries are divided into batteries, modules, and PACK. It
is said that Geely has obtained all the technology rights from batteries to PACK
in this cooperation, and the purchase price is very fair.
Industry professionals analyzed that because the Nanjing plant was unable
to produce as planned, the equipment was depreciated every day, and it also cost
personnel and maintenance costs. Volvo is a major customer of LG (the largest
customer in Europe), and now it has also added Lynk & Co and London rental
For car customers, selling to Geely is a quick cut to solve the vacancy problem
of the Nanjing factory, save or even expand the order in the Chinese market, and
retain a major global customer, and it is not a loss.
