China further expanded the global advantages of the new energy supply chain, with the total amount of new financing exceeding US$ 10 billion.

At present, the output of electric vehicle batteries from China factory accounts for nearly three quarters of the global output, and occupies a dominant position in processing rare earth elements (such as oxides, metals and magnets used in batteries) with a market share of 90%.

With the further consolidation of China’s leading position in the global new energy technology supply chain, three domestic electric vehicle battery and material companies are seeking a new round of market financing of more than 10 billion US dollars, which will exceed the funds invested by the United States, South Korea, Australia and other countries in the same field.

Last week, Contemporary Amperex Technology Co., Limited New Energy Technology Co., Ltd. (CATL), the global leader in power batteries, completed a huge increase. Contemporary Amperex Technology Co., Limited (300750. SZ) announced on June 22nd that the fixed issue price was 410 yuan per share, and the total amount of funds raised was nearly RMB 45 billion. Contemporary Amperex Technology Co., Limited is an important battery supplier for Tesla and domestic automobile manufacturers (such as Geely). According to the data of Financial Times and Luft Refinitiv, including the latest bulk stock issue, Contemporary Amperex Technology Co., Limited has raised about $13 billion, or about 89 billion yuan, since its listing in Shenzhen in 2018.

Contemporary Amperex Technology Co., Limited (300750.SZ) stock chart.

In the aforementioned financing, foreign investors have also joined in, including JPMorgan Chase, Barclays Bank, Morgan Stanley, Macquarie Bank and HSBC, accounting for about 32% of the total issuance.

Neil Beveridge, a senior analyst at Bernstein, a Wall Street investment bank, said that China is positioning itself as the "Saudi Arabia" in the field of new energy technology and hardware, becoming the lowest-cost supplier in the world and striving for the most market share.

According to some investors, Tianqi Lithium Industry (002466.SZ), which is listed on Shenzhen Stock Exchange, plans to list on Hong Kong Stock Exchange for the second time, with the target of raising 1 billion to 2 billion US dollars. Tianqi Lithium Industry is one of the world’s largest suppliers of new energy core materials for lithium batteries. According to data from research institute Dealogic, this will be the largest financing of the Hong Kong Stock Exchange this year. Since the beginning of June, Tianqi Lithium’s share price in Shenzhen Stock Exchange has soared by more than 21%.

Tianqi Lithium Industry (002466.SZ) Stock Chart

Huayou Cobalt (603799.SH), another large domestic raw material supplier listed on the Shanghai Stock Exchange, announced on June 19th that it would raise no more than 1.77 million yuan through non-public offering of shares. Most of the funds will be used for the wet process project of nickel hydroxide and cobalt with an annual output of 120,000 tons of nickel metal, which is a joint venture of Huayou Cobalt in Indonesia. Indonesia Huashan Nickel Co., Ltd. mainly processes and manufactures nickel, the key material of electric vehicle batteries, in Indonesia. Trafigura, a trading company, said that more than 90% of the world’s battery-grade lithium is produced by China smelters, which are also responsible for processing most of the world’s cobalt, nickel and other key battery materials.

Huayou Cobalt (603799.SH) Stock Chart

The Financial Times reported that other countries are also trying to narrow the gap. The United States recently signed a $120 million agreement with Australian rare earth merchant Lynas Rare Earths to build one of the first heavy rare earth separation facilities in the United States. In February this year, the Australian government provided a loan of US$ 100 million to Hastings Technology Materials to develop rare earth mines and smelters in Western Australia.

According to Bernstein, a Wall Street investment bank, with the increasing demand for electric vehicles, the global battery capacity is expected to increase by 40% every year by 2025, from 823 GWh in 2021 to 3252 GWh. As the United States and Europe further increase subsidies for local electric vehicle battery manufacturing, the market share of China’s electric vehicle battery capacity may decline slightly. However, it is predicted that by 2025, China’s share will still account for about two-thirds, Europe’s share is expected to expand from 15% to 20%, the United States’ share is expected to expand from 8% to 12%, and Contemporary Amperex Technology Co., Limited will continue to maintain its global market share of 20%.

In addition, although the market share of China’s electric vehicle battery capacity will drop slightly, the cost advantage will be further highlighted. At present, the unit cost of building an electric vehicle battery factory in China is about $60 million per GW. However, with the rapid expansion of the factory scale, the cost will be reduced to about $50 million per GW in the next few years. In the next 10 years, the global average cost of building similar factories will be about $78 million per GW.

At present, South Korean companies, such as Contemporary Amperex Technology Co., Limited’s competitors LG, South Korea’s SK Group and Samsung, rely as much as 60% on China’s key battery materials, and these companies are trying to reduce their dependence. However, Kia, a subsidiary of Hyundai, a South Korean automobile group, plans to use Contemporary Amperex Technology Co., Limited batteries in a new electric vehicle model, which will mark the first time that batteries made in South Korea have entered the Korean market.