China’s CATL, Nio deepen partnership to develop EV batteries with longer lifespans

Contemporary Amperex Technology Ltd (CATL), the world’s largest maker of electric vehicle (EV) batteries, has intensified efforts to develop batteries with longer lifespans after deepening its partnership with carmaker Nio.\nThe two companies said they were committed to finding solutions to an issue that could cost millions of EV users trillions of yuan to replace expired batteries.\nUnder a five-year agreement, CATL and Nio would pursue new technologies aimed at extending the life cycle of EV batteries, they said in a statement on Tuesday. The signing represented “a higher level of synergy between the two companies across the whole ecosystem”.\nCATL and Nio first announced plans to jointly develop longer-lifespan batteries in 2024.\n“Batteries will become a big issue in eight to 10 years’ time,” William Li, CEO of Nio, told reporters in a media briefing. “We are under time pressure to find ways to tackle the problem.”\nLi said owners of China’s existing 40 million electric cars would have to spend at least 60,000 yuan (US$8,585) each to buy new batteries after 2032 when the life cycle of current packs ended. That could amount to a total cost of as much as 3 trillion yuan, he added.\nLi made the remarks as Nio, founded in 2014, reached another milestone as its 1 millionth car rolled off the production line on Tuesday. The Shanghai-based EV assembler, viewed as a Tesla challenger in mainland China, aimed to achieve annualised sales growth of 40 per cent to 50 per cent over the next decade, according to Li.\n\nUsed batteries could jeopardise the mainland’s EV industry, where dozens of unprofitable players are already struggling to stay afloat amid cutthroat competition.\nChina is the world’s largest automotive and EV market, with its electric carmakers at the forefront of EV technology and production, according to analysts. But excess capacity and a brutal price war were expected to squeeze out most players in the next five years, according to AlixPartners.\nOf the 129 EV brands currently produced by about 50 carmakers, only 10 of them – up to 15 in an optimistic scenario – were expected to become profitable by 2030, accounting for nearly 75 per cent of the mainland’s EV market, said Stephen Dyer, Greater China co-leader and head of Asia automotive practice at the global consultancy.\nLi, however, said pessimism had been overstated. “China’s mammoth market is big enough to ensure profits for at least 10 major EV makers and a few smaller ones,” he added.\nNio’s deliveries in December hit a record 48,135 vehicles handed to customers. Its total sales last year climbed 47 per cent to 326,028 units.\nThe company also collaborates with CATL on the development of battery swap technology, which allows EV owners to exchange a spent pack for a fully charged one in just 100 seconds.\nCATL, based in Ningde, in southeastern Fujian province, held a 38 per cent share of the global EV battery market last year, according to Seoul-based consultancy SNE Research. Industry analysts estimated that 1 gigawatt-hour of battery capacity could power up to 20,000 EVs, each with a range of about 500 kilometres.\nCATL – whose clients include Tesla, BMW and Volkswagen – has been expanding into other electrification niches. The company began developing marine applications in 2017 and has since supplied batteries to 900 vessels operating on rivers.\n