"This production line only requires four people to operate, including two for the final Pack (battery pack) cover stage," said a worker standing next to the battery pack production line. On June 5th, at the SAIC-GM Power Battery System Development Center in Jinqiao, Pudong, Shanghai, the media saw the SAIC-GM battery production line, which officially began operation at the end of last year. The fact that over a dozen intricate and complex processes are all completed by "Minion" robotic arms proves that the irreversible development of new energy vehicles is shifting competition among automakers to the research and development and production of electrical systems. This seemingly unassuming battery production line will inevitably have a significant impact on China's new automotive manufacturing industry chain.
On this day, global automotive giant General Motors (GM) released its "zero-emission" development roadmap in China. Besides announcing plans to launch 20 new energy vehicles in China by 2023, GM showcased for the first time its complete battery roadmap in China—from R&D and verification of individual cells to testing and assembling battery packs. Except for individual cell production, GM already possesses the development and manufacturing capabilities for all other links in this industrial chain. In the battery laboratory of GM China's Advanced Technology Center in Pudong, Sino-US (GM North American headquarters) exchanges on cell and battery system development began six years ago. In a sense, this automaker is already half a competitor of its partner, South Korea's LG Chem.
“The key to electric vehicles is the battery. General Motors began building its own battery R&D capabilities very early on, focusing on fundamental research into battery materials and single-cell design, pushing the limits,” said Jennifer Goforth, Chief Electrification Engineer at General Motors China. In 2016, GM created the position of “Chief Electrification Engineer” in China, responsible for the overall development of GM’s new energy products in the country.
General Motors is not the only multinational automaker investing in battery R&D and production capacity in China. BMW, Volkswagen, and Mercedes-Benz have all invested hundreds of millions or even billions of yuan in China to build battery production lines, aiming to localize the production of this core component for new energy vehicles. At the end of May, BMW Brilliance's power battery plant, which had only been in operation for seven months, announced the start of its second-phase expansion. Volkswagen's global power battery investment of 50 billion yuan is also rapidly progressing in China…
With the phasing out of subsidies acting as a catalyst, domestic investment in battery production capacity has become a new battleground for automakers in China. Whoever can reduce battery costs the fastest will gain an advantage in China, the world's largest new energy vehicle market. The renewed strength of multinational automakers in the research and production of power batteries may be key to reversing the competitive advantage of domestic automakers in the new energy vehicle market.
The entire path of general-purpose battery R&D
"General Motors previously announced plans to launch 10 new energy vehicles in the Chinese market between 2016 and 2020, and this plan is currently progressing smoothly." On June 5th, GM released its "zero-emission" development roadmap in China. Matt Tsien, President of GM China, stated that the company will further expand its product portfolio, expecting the total number of new energy vehicles in China to double by 2023.
Currently, General Motors has three new energy vehicles launched in the Chinese market: the Cadillac CT6 plug-in hybrid, the Buick VELITE5 extended-range hybrid, and the Baojun E100 pure electric vehicle. In August of this year, the Buick VELITE6 plug-in hybrid and its sister model, the VELITE6 pure electric vehicle, will also be launched. As of May this year, General Motors' cumulative pure electric mileage in China has exceeded 75 million kilometers.
Compared to Volkswagen's new energy strategy with over 40 models, General Motors has consistently been considered too conservative in its pace of commercializing electric vehicles. An increasingly clear style indicates that "risk minimization" has become the primary principle for GM CEO Mary Barra's team.
The most obvious example is that GM launched the industry's first mass-produced electric vehicle, the EV1, as early as 1996. Subsequently, it launched groundbreaking hybrid and pure electric models, including the Chevrolet Volt and the Chevrolet Bolt. The Bolt even posed a technological challenge to the Tesla Model 3 in the North American market. However, in China, after the failure of the Chevrolet Volt experiment years ago, GM was unwilling to be the "first to eat grapes."
However, the focus of this "zero-emission" roadmap is not on the launch plan for new energy vehicles, but rather on showcasing the strength of its battery technology—the initial stage of this roadmap. In other words, GM is announcing to the outside world that it is becoming the automaker that understands batteries best.
“Our commitment to the new energy vehicle sector in China goes far beyond simply selling electric vehicles. The GM China Battery Lab is our second largest battery lab globally, encompassing both battery research and development and testing,” said Jennifer Goforth. Established in 2011 to accelerate electrification R&D capabilities in China, the battery lab is a branch of GM's global battery lab system, housed within the GM China Advanced Research and Development Center. Its single-cell battery testing lab has the capacity to simultaneously test 96 individual cells and 6 battery packs.
What's even more remarkable is that this lab not only conducts research, verification, and testing of battery systems, but also involves the design of battery chemistry and individual cells—starting from the very beginning of battery development. Currently, most multinational automakers are still at the first step—battery system development. Gao Zhenni revealed that before GM's individual cells are officially used, they require at least 3-5 years of testing and verification in the lab to fully understand the battery pack's safety and other technical performance aspects.
Industry insiders believe that, from this perspective, Mary Barra's "risk minimization" strategy will not hinder GM's maintenance of technological advancement. Mary Barra requires GM to invest in research and development of all forward-looking technologies several years in advance, master every aspect of the technology, and then commercialize it only after ensuring the advancement and safety of each technology.
Battery Cells: Competition Beyond the Automotive Sector
Unlike BMW's power battery center in Shenyang, GM's localized battery entity, built with an investment of 1.6 billion yuan, is named the "SAIC-GM Power Battery System Development Center." Last June, air-cooled battery packs assembled on one of the center's battery plant's production lines began to be installed in the Cadillac XT5 mild hybrid model produced by SAIC-GM. This August, another production line for liquid-cooled battery packs will also be launched.
In terms of production systems, GM develops new battery materials and designs individual battery cells through its battery labs, maintaining communication with LG. The individual battery cells developed for mass-production vehicles are delivered to LG for production, and then the vehicle manufacturers purchase LG's products for assembly in their own battery plants. "We are currently in talks with several battery suppliers, but no final decision has been made," said Qian Huikang. He added that the final supplier will not be limited to just one; the technology and production capacity of domestic battery manufacturers have improved significantly, and any supplier that can meet GM's product technical requirements is under consideration. As the world's only battery chemical company, LG is a global partner of GM and a battery supplier for many of SAIC-GM's new energy vehicles. GM's cooperation with LG focuses on cell development and battery technology upgrades. It is understood that after the Buick VELITE 6 is produced domestically in August this year, SAIC-GM is expected to switch its battery supplier to a domestic manufacturer in hopes of benefiting from subsidies.
In terms of production processes, most automakers currently follow the same path as General Motors—purchasing battery cells and building their own factories to assemble battery packs. However, they rarely delve into the research and development of battery cells (electrode materials and electrolytes). Nevertheless, a growing number of automakers are recognizing the importance of early-stage battery R&D. Battery cells are the core component of power batteries, determining their performance, capacity, charging efficiency, lifespan, and most importantly, cost—key factors in electric vehicle competition. More importantly, each automaker's products are different, with varying performance and design requirements for batteries. Battery manufacturers cannot conduct targeted development, and battery technology is still in a phase of exploration with multiple routes, where new technologies could potentially disrupt existing ones. For automakers, this "loss of control" over battery technology will increase the risks of future competition.
Multinational automotive giants are already taking action. Last November, BMW Group broke ground on its battery cell technology center in Munich, Germany, with operations expected as early as 2019. Behind this €200 million investment lies BMW's need to enhance battery performance and provide greater guidance to its suppliers. Volkswagen announced last year that it would invest €50 billion in electric vehicle batteries, and its previously announced solid-state battery with a range exceeding 1,000 kilometers is reportedly expected to enter mass production in 2025.
According to technical personnel at GM China's Advanced Technology Center, LG, as a representative of pouch battery technology, has already controlled its sales price in the European and American markets to below 1 yuan/watt-hour while maintaining a profit margin. In 2016, LG Chem declared its intention to achieve a price of 1 yuan/watt-hour, which became the pretext for the price war ignited by Korean battery manufacturers that year. In June 2017, power battery expert Ouyang Minggao stated that the cost of power batteries in China was expected to reach 1 yuan/watt-hour by 2020. However, since 2018, due to the soaring prices of international lithium ore and other raw materials, whether 1 yuan/watt-hour can be achieved remains uncertain.
