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Will a trade war between China and US affect the path of globalization of China's lithium industry?

On April 4, the United States released a list of China's import products, including new energy vehicles and related parts. As a counterattack, China also has cars in its list of proposed tariffs.


The United States has mostly opened fire on China's auto parts , and China has fought back against with the whole vehicle.


Along with the new energy automobile's tuyere, China's Lithium Battery company has made great progress. Battery enterprises represented by CATL, BYD,and Battery materials enterprises represented by CAPCHEM, DFD are accelerate the path of international expansion. Will the China-US trade war hamper the process of Chinese companies' expansion?


In the field of global lithium batteries, Japan and South Korea enterprises occupy the leading position for a long time, China's enterprises catch up from behind. But why didn't the U.S. and Europe get the world’s leading ?


Lithium Battery companies have less impact

The list of Chinese imports, which include new energy vehicles such as lithium-ion batteries, includes more than 1,300 projects in the US.


Cui Dongshu, the secretary-general of the national passenger car market information association, told Lithium Battery that a trade war between China and the United States would have little impact on lithium battery companies.China's exports to the U.S. market share lithium-ion batteries is not large, on the other hand, China has large enough digestive capacity in the domestic market, electric cars and batteries, export volumes to the United States are relatively small, so the impact on the lithium battery plate companies.


EVE Energy Co., Ltd said recently in the trading platform, the company mainly exports of Lithium ion Battery is lithium battery products and consumer, mainly exported to Europe, North America, Asia Pacific, and many other countries and regions, the proportion of the United States is low.The company's new products and new technologies have strong advantages and are unique and not easily replaced. Therefore, the company thinks that the trade policy of us tax increase has little impact on the company's performance.


But there is industry analysis, affected by the trade friction is the main domestic iron and steel, aluminum and other industries, especially in the aerospace, information and communications technology, machinery manufacturing and other fields, the second is the trade industry. Due to the high degree of reliance on advanced production equipment in the process of lithium electric manufacturing, there may be a partial impact on the lithium electric manufacturing industry.


A VC institutions partner, said in the future if the overall market demand in the United States is large, such as electric vehicles, battery business is likely to adopt localization of production, namely our enterprise directly to the United States to build factories, to local consumers and customer service, "if in this way, tariff is does not have a large effect on our business."


Chinese companies are accelerating the global expansion

In the long run, a trade war will cause destruction to both sides.


In recent years, China's lithium battery related companies have risen rapidly, and they have begun to expand their globalization and compete with Japanese and Korean companies.The news that Chinese battery companies are expanding in Europe is buzzing. The US also has a huge new energy vehicle market, and in the shadow of a trade war, it is hard for Chinese battery companies to open the American market.


The global expansion of Chinese companies is already emerging in the European market with the European market demand growth. China's power battery companies and materials companies have seen an opportunity to accelerate their expansion and distribution in Europe. At present, the main source material companies, such as Jiangsu Huotai and Tianyi Material are all accelerating the European market process.


To capture the European market, CAPCHEM also built a factory in Poland. On March 26 CAPCHEM announced,  Poland CAPCHEM as a wholly owned subsidiary invest construction capacity of 40000 tons of Lithium ion Battery electrolyte, 5000 tons of 5000 tons of NMP and conductive paste project, is expected to invest 360 million yuan.


CAPCHEM said the layout in Poland , can meet the customer need, to seize market opportunities. Lithium ion Battery materials business continued rapid growth for the company to provide driving force, and enhance the company's overall profitability.


And CATL is also considering Germany, Hungary, Poland as the fatory loaction, to provide power battery for car companies, including BMW. The specific production scale depends on the regional market demand.


Therefore in the long run, a trade war poses no threat to China's lithium-ion companies, and it is hard to say that Chinese battery companies have no ambition to enter the US market. 

(Source: http://www.itdcw.com)



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