Why are lithium batteries manufactured in Germany by Anhui enterprises?

"I am very fortunate; this is a wonderful moment in my life!" Andreas, a worker from Göttingen, Germany, who had spent his entire life manufacturing automotive components, never dreamed that he would be able to "transform" himself into manufacturing lithium batteries with the support of Chinese technology. Overwhelmed with excitement, he, under the witness of many important guests, signed his name on the first battery pack that just came off the production line.

What Andreas participated is the recent launch ceremony of the first battery production line at Gotion High-Tech's German base. This marks the achievement of "Made in Germany" for Gotion's lithium batteries.

Why did this lithium battery company from Anhui voluntarily venture overseas to establish a factory in Germany? There is an inevitable connection and an interesting story behind it.

The Transformation of "Made in Germany"

Göttingen, a city rich in academic atmosphere, is also a famous university town in central Germany. Lower Saxony, where it is located, is Germany's leading automotive state, and the headquarters of Volkswagen Group is located here.

In 2021, Gotion acquired the Bosch factory in Göttingen, Germany, establishing its first new energy production and operation base in Europe.

With dedicated workers, mature technology, and sound management, the first battery pack was successfully produced after more than a year.

The capacity planning for the Göttingen factory is 20GWh, expected to be completed in four phases. Once all phases are completed, it is expected to achieve an annual output value of 2 billion euros.

Peter Willemsen, Chief Operating Officer of Gotion Global and General Manager of Gotion Germany, stated that the first production line of the Göttingen factory has officially started production and has received a large number of European orders.

On the same day as the launch ceremony, Gotion signed cooperation agreements with several internationally renowned companies, including BASF, ABB, Ebusco, and Ficosa.

Win-Win in Going Global

Why do Chinese power battery companies venture overseas to establish a base in Europe? Because this is a "win-win" situation for both Chinese companies and Europe.

Germany is under pressure to undergo a green and low-carbon transformation and hopes to empower its local manufacturing industry with more advanced new energy technologies.

"By 2030, Germany aims to have at least 15 million pure electric vehicles on its roads, but Germany still has a long way to go to achieve this goal. Currently, Chinese companies have more than 100,000 employees in Germany and provide important technological impetus in key areas for the future," said Michael Schumann, President of the Federal Association for Economic Development and Foreign Trade (BWA) in Germany.

On the other hand, China's new energy technology is in a leading position globally. In 2022, China produced a total of 6.85 million NEVs, with an installed capacity of 561GWh, accounting for approximately 60% of the global market, leading the world.

According to SNE Research, an international research institution, European demand for electric vehicle batteries is predicted to reach 406GWh by 2023, with expected supply of 335GWh, leaving a gap of nearly one-fourth.

For Chinese power battery companies, venturing overseas is also an opportunity.

The Newly approved EU Battery Regulation stipulates that starting from 2026, all batteries in newly purchased vehicles, fixed storage systems, and large industrial projects in Europe will require a battery passport, and only batteries with a passport can be sold in the European market. Currently, many Chinese companies are actively participating in the European Battery Passport project.

Localizing production and supply in Europe can not only reduce logistics costs and make products more tailored to the European market's needs but also enable Gotion to quickly adapt to local regulatory requirements and accelerate the construction of a local customer network.

So, why Lower Saxony? On the one hand, Lower Saxony has established a friendly provincial-state relationship with Anhui Province, with a cooperation history of nearly 40 years. On the other hand, it is the location of the Volkswagen Group headquarters, and Volkswagen Group is Gotion's largest shareholder.

"Therefore, with Gotion's technological accumulation and Volkswagen's brand support, the power battery products produced in Göttingen will have a broad market demand for decades to come," said Chen Ruilin, Vice President of Gotion High-Tech's International Business Division.

The Unstoppable Wave of Openness

Gotion's venture overseas is not an isolated case. Round after round of multinational cooperation is yielding the fruits of openness.

In April of this year, international automotive giant Volkswagen Group announced an investment of approximately 1 billion euros to establish a research, innovation, and procurement center focusing on intelligent connected electric vehicles in Hefei. This will become Volkswagen's largest procurement and R&D center outside of Germany.

"Anhui has become one of the most important high-end technology research and development bases in China! "At the 2023 World Manufacturing Conference, Volkswagen Group (China) Chairman and CEO Ralf Brandstaetter highly praised Anhui and admitted that Anhui and the provincial capital Hefei play a key strategic role in Volkswagen's transformation to intelligent connected vehicles.

Gotion's "going global" and Volkswagen's "landing" both reflect China's leading advantage in the new energy and new energy vehicle industry.

"Nowadays, the 'going global' of China's lithium battery industry follows the same logic as the influx of foreign investment from multinational automakers into China two or three decades ago. Many of our technological fields are already world-leading," said Yin Haitao, Vice Dean of the Antai College of Economics and Management at Shanghai Jiao Tong University.

After the industry switched lanes, the technology output patterns between China and some established European and American companies have reversed.

With supply and demand, there will be economic cooperation and exchange.

Just as a leading official from Anhui said during the inauguration ceremony of the Göttingen factory, in the era of economic globalization, cooperation and competition promote economic prosperity. China will firmly adhere to the concept of open cooperation, while Anhui vigorously supports local enterprises in "going global" and actively expanding into the global market.

Source: Anhui Daily