The conference was opened by Gergely Fabián, State Secretary at the Ministry of Economic Development who said that “one of the greatest success stories” of the last 30 years in Hungary is the automotive industry. “One of the greatest challenges and at the same time – opportunity – is the electrification and the boom in the EV industry,” he added. “We have to create an ecosystem, it is not just about cars but there are also benefits for households and industry.”

Looking at the battery ecosystem further, Thore Sekkenes, the European Battery Alliance (EBA250) Programme Director, highlighted the most important event of the past year: the Inflation Reduction Act (IRA) introduced by the US which puts pressure on the EU and affects EU competitiveness. However, the EU has already responded by enacting new legislation such as the Critical Raw Materials Act, Net Zero Industry Act and new Batteries Regulation. What we need is international cooperation is fundamental, the US has taken the lead, so let’s follow them!

“The battery industry community has been growing fast in this country since last year. The net revenue of the Hungarian battery industry is forecasted to increase by at least 50 per cent in 2023 based on its 2022 performance. Over the last five years the battery industry, following the automotive industry, has become the second largest manufacturing sector of the national economy in terms of its share in overall industrial production,” said Péter Kaderják, Managing Director of the Hungarian Battery Association.

“Hungary is a meeting hub of Eastern and Western companies, which will guarantee that the country will be a leading figure in the transformation of the automotive industry. Hungary is already the 4th largest battery producer and due to the new investments, it will rank soon second following China,” said István Joó, CEO of the Hungarian Investment Promotion Agency.

Battery manufacturer CATL aims to build a comprehensive battery production value chain that meets sustainability criteria in all respects, announced Jason Chen, General Manager, Operations CATL Europe.

“We are very proud that we have already achieved carbon neutrality in four of our battery plants and our goal is to replicate these global experiences in Debrecen too,” he said, underlining that the Hungarian plant will be equipped with state-of-the-art production technologies.

Joaquim Nunes de Almeida, Director of the European Commission’s DG GROW department, provided a more detailed overview of the EU’s progress in battery production growth. “In 2022, the number of lithium-ion gigafactories announced in the EU increased from 26 to 30, meaning 30 GW of new installed capacity,” he said.

The event’s first discussion panel focused on the European regulatory landscape, looking into legislative strengths, gaps and the EU’s global influence in this area. “The regulations will have a huge impact on the global scale – the entire supply chain needs to look at the new regulations and their obligations,” Ákos Nagy, Senior Counsel at Kinstellar emphasised. He highlighted the example of recycling, recovery and recollection, where key adjustments will have to be made. “By the end of 2025, around 70 per cent of lithium-based batteries will need to be recycled – this is a huge obligation,” he underlined.

Batteries will be essential in the green transition of Europe and Hungary, said Bernadett Papp, Head of Market Analyses at Pact Capital. “The recently adopted Battery Regulation sets the framework for a sustainable future where batteries’ carbon footprint can be reduced. Although the relevant delegated and implementing acts will be published later by the European Commission, market participants can use the Harmonised rules for the calculation of the Carbon Footprint of Electric Vehicle Batteries by the Joint Research Centre of the European Commission as a guideline to start preparing for strict reporting obligations.”

In a keynote speech, Bob L. Galyen, SAE International Fellow and Battery Standards Steering Committee Chairman and NAATBatt International Chairman Emeritus and CTO, presented an in-depth perspective on the US IRA. In the US, the IRA is set to significantly benefit the country’s automotive industry such as TESLA. At the same time, he does not expect the act to have a major negative impact on Europe. “The bottom line is that the IRA is not going to impact the European community that much, in fact, it might enhance it,” said Mr Galyen. The EU is a target for investors, as seen by CATL’s investments in Hungary, he added.

The event’s second panel discussion focused on grid-integrated and market-based energy storage investment support schemes in Hungary. “At the beginning, you need subsidies [for energy storage systems] to create a market,” said Róbert Szabó, Director of Smart PV Solutions at Huawei, referencing the case of Germany where subsidies introduced in the past have incentivised strong consumer interest.

Experts also participated in a roundtable discussion on perspectives for developing the battery recycling industry in Central and South-Eastern Europe. “We are very proud, that we could be a lead waste service provider for LIB manufacturers as a 100 per cent Hungarian owned company,” said Péter Vermes, General Manager at Éltex. “Based on our more than 30 years of experience in waste handling we believe that we could fulfil the future legal and technical requirements of this growing market segment, and could serve these producers on the highest level.”

Providing a further industry perspective, Bernáth Zoltán, Sales and Logistics Director of SungEel Hitech emphasised that technological improvements are another important element in the development of battery recycling, highlighting the complexity of the overall recycling process.

Keith Gough, CEO of SunSynk Limited said that “it is key to start on a small scale when it comes to developing batteries. “We now have 350,000 solar plants globally, with around 2 GW of battery storage. We lead the market in many countries,” he said.

Next, experts sat down for a roundtable discussion on opportunities for Hungarian and European suppliers in the Hungarian battery industry landscape and the scope for regional cooperation. Andrea d’Alessandro, Head of International and Multinational Corporate Customers at UniCredit Bank Hungary said that the bank sees a significant opportunity in the growing battery industry. “The financial needs of the players in the battery supply chain will be even more relevant in the next five years and beyond, hence we want to confirm our interest and capabilities as a reliable and long-term partner.”

Vertical integration in battery production would require substantial expertise in multiple domains, which would necessitate a large investment in R&D, said Tamás Bakos, Regional General Manager CT Central South Europe, at Atlas Copco. “Companies may find it more feasible to continue working with specialised suppliers who can provide focused solutions, like Atlas Copco’s compressed air, vacuum and nitrogen systems.”

The last roundtable of the day delved into battery-related R&D in Europe and Hungary. On the topic of incentivising businesses to invest more in R&D, among other things, the speakers highlighted the need for cooperation between companies and research and educational institutions, alongside strong communication whilst building these relationships. Other speakers also noted the importance of promoting entrepreneurship in universities and accentuating the visibility of local projects to increase the success rate of projects coming from Hungary and CEE.

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The Hungarian Battery Association organized the third Hungarian Battery Day in Budapest on October 26. The main objective of the international event is to bring together the players of the fast-growing battery industry and to initiate a discussion on the opportunities and challenges for cooperation in Hungary and the region. The conference is an important annual meeting point for the battery industry where professionals also have the opportunity to discuss the carbon neutrality goals for the development of the Hungarian battery value chain up to 2050.

“CATL actively supports the carbon neutrality targets set by the international community. We are very proud that we have already achieved carbon neutrality in four of our battery plants and our goal is to replicate these global experiences in Debrecen too. Our Hungarian plant will enable us to better serve the needs of the European market, enhance the development of our global manufacturing network, and help accelerate e-mobility and energy transition in Europe,” said Jason Chen in his keynote speech.

Balázs Szilágyi, CATL’s European director for public affairs moderated a panel discussion on the new EU Batteries Regulation published in August 2023. During the panel, the executive director of Eurobat (Association of European Automotive and Industrial Battery Manufacturers), René Schroeder gave an overview of the new regulation, while Jacopo Tosoni, the head of policy at EASE (European Association for Energy Storage) explained specific requirements for stationary energy storage systems. Ákos Nagy (Kinstellar) focused on how the battery value chain should prepare for the new regulation. His thoughts had been supported by Bernadett Papp (Pact Capital), who advised companies on how to further reduce their carbon footprint.

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As owning an EV becoming a global trend, the market demand for lithium batteries has surged. According to one industry estimation, global demand for lithium batteries will exceed 1,700 gigawatt-hours (GWh) by 2025, doubling from 2022.

Such a hefty demand by the market calls for a significant capacity to fill. China-made batteries are of high quality with sufficient production capacity, so it is believed that Chinese battery companies will play a major role in this wave of global new energy revolution, analysts said.

China’s battery materials and EV technology applications continue to make breakthroughs. The country now has formed the world’s largest battery manufacturing value chain, extending from material research and development, battery production, recycling to equipment support, analysts said.

Complete system

At the same time, China has formed a relatively complete EV manufacturing supply chain, and about 70 percent of the global battery production capacity is located in China, said Zhang Yongwei, vice president of China EV100, a major think tank in the EV sector, said on Tuesday at the Conference on Innovated Global Supply Chain of NEV and ICV.

According to the statistics by SNE Research, in 2022, seven of the world’s top 10 electric battery makers were in China. As Chinese battery companies now explore the global market, the export volume of batteries continues to increase.

In the first three quarters, China’s exports of auto-use electric batteries totaled 89.8 GWh, up 120.4 percent year-on-year, accounting for 88.7 percent of all battery exports, according to statistics from the China Automotive Power Battery Industry Innovation Alliance, released on October 11.

“The overseas market exploration by China battery companies is accelerating, and their investment in EV plants abroad is also conducive to further improving their global EV production capacity,” Zhang Xiaorong, director of the Beijing-based Cutting-Edge Technology Research Institute, told the Global Times.

“Going global” is an inevitable trend for Chinese battery makers. Although Chinese companies now have the largest market share, the batteries are mostly produced in China, with their overseas expansion lagging far behind rivals such as LG, Samsung and other Japanese and Korean companies, Xie Zongbo, a media columnist, told the Global Times on Tuesday.

“The US is a hot destination for battery and EV investment. The supply chain of the traditional internal combustion engine auto-making there is relatively complete, which could bring new market space for Chinese companies,” Xie said.

‘Going global’

As one of the latest examples, Chinese battery manufacturer Gotion High-tech Co announced two investment plans of battery plants in two US states – Illinois and Michigan.

The planned $2-billion lithium battery manufacturing plant in Illinois is expected to produce 10 GWh of lithium battery packs and 40 GWh of lithium-ion battery cells annually.

Gotion said that it will invest $2.36 billion in the Michigan plant, with plans to complete plant construction by the end of 2031. The site will produce anode and cathode materials for the batteries.

On September 5, another Chinese lithium battery maker EVE Energy set up a joint venture in the US to produce batteries used in the designated North American commercial vehicle segment, according to the company’s announcement on its website. Shareholders of the joint venture will be EVE Energy’s wholly-owned subsidiary EVE Energy US Holding LLC (EVEUSA), Electrified Power, Daimler Trucks and Paccar Inc., which will invest in the construction of battery production capacity.

Chinese battery manufacturers are not only expanding investments in the US, but in other markets too.

For example, Gotion’s factory in Gottingen, Germany, supported by Volkswagen, is expected to reach a production capacity of 5 GWh by mid-2024 and 20 GWh when fully complete.

In August 2022, China’s battery giant CATL announced that it will invest 7.34 billion euros ($7.8 billion) to build a 100 GWh battery plant in Debrecen, Hungary, which is also the company’s second battery plant in Europe.

However, analysts said that some risks remain for Chinese companies investing abroad.

In the context of the intensified technology containment by the US against China, Chinese enterprises may face potential risks in opening factories in the US, An Guangyong, an expert with the Professional Committee of Credit Management of the China Mergers and Acquisitions Association, told the Global Times on Monday.

In February, CATL and Ford reached a deal to invest $3.5 billion in an electric vehicle plant in Michigan, which was paused in September. US lawmakers have been probing Ford’s battery plant plan over hypothetical concern it may facilitate the flow of US tax subsidies to China, and leave Ford dependent on Chinese technology, Reuters reported.

“Chinese companies may face more regulatory scrutiny and market access restrictions, which will add uncertainty to Chinese companies operating in the US. Meanwhile, policy uncertainty is to impact normal business operations,” said An.

An said that local companies in America may have access to more support from the US government, while Chinese companies may face risks of unfair competition and other challenges.

Analysts said that Chinese companies “going global” should be treated fairly by foreign governments, as the plants invested by Chinese battery makers will assist local industrial chain, in addition to creating new jobs for locals.

The post Chinese battery makers ‘go global’, set to play a leading role in global new energy revolution appeared first on Hybrid & Electric Vehicle Battery Distributor .

He stressed that

it is a sign of the utmost confidence in the Hungarian people that BMW is setting up a new, currently non-existent, all-electric platform production plant in Hungary.

Moreover, the cooperation between BMW, the government, and Debrecen will ensure that the necessary workforce is always available.

https://www.facebook.com/watch/?v=1077809256559977

“The government has provided HUF 25 billion (EUR 65 million) to the university to expand the capacity of the technical engineering faculty and to create a new research institute for automotive engineering. (…) The vocational training center is also now working with more than 12,000 students,” he added.

Szijjártó recalled that

the last decade and a half had been a period of crises, and the world economy had been turned upside down twice in recent years, but there was one process that nothing could stop: the electric transition of the automotive industry.

“Well, I think that without any pretension or exaggeration, based on the facts alone, we can safely say that Hungary has become the European champion of this electric car transformation and we are among the world leaders,” he added.

He added that this was due to the fact that

companies from the West and the East, especially from Germany and China, had found a way to cooperate in Hungary.

This is of course due to the lowest taxes in Europe and the most competitive investment environment in Europe, but it is also due to the foreign policy strategy based on mutual respect, enabling Hungary to build and maintain civilized relations with both the East and the West.

Szjjártó described BMW’s investment in Debrecen as an important milestone, as it means that all three German premium car brands (Audi, BMW, and Mercedes) will now have factories in Hungary. Furthermore, he said, it has also triggered huge Chinese investment, as evidenced by the fact that five of the world’s ten largest battery manufacturers in the East have now committed to Hungary.

“Thus we have shown that not only is East-West economic cooperation possible, but it is also legitimate because of the interdependence and has extremely positive effects, such as the creation of jobs and the use of the latest technology.”

Finally, the minister stressed that

the electrification of the car industry is a foregone conclusion, without which it would be impossible to meet climate targets, as road transport accounts for roughly 14 percent of emissions.

He also pointed out that the production value of the domestic automotive industry exceeded HUF 10,000 billion (EUR 26 billion) for the first time last year, backed by balanced and stable growth.

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