Company aims to be leading partner to support transition to net-zero carbon transportation

Battery producer Envision AESC is planning to accelerate its expansion in developed markets, including the United States and Europe, as part of its plan to increase its global market share and prepare for an anticipated boom in sales of new energy vehicles.

Envision AESC, the battery-producing arm of Shanghai-based world-leading green technology company Envision Group, said on March 16 it will build a new plant in the US to provide battery modules for Mercedes' production of all-electric EQ vehicles in the state of Alabama.

The plant will be operational in 2025 and will be a major supplier securing capacity for next generation Mercedes-EQ products built in the US in the years to come, said Mercedes-Benz Chief Technology Officer Markus Schaefer.

Mercedes, which plans to produce batteries in Europe, North America and Asia, aims to have eight cell factories with partners around the world with 200 gigawatt-hours of battery production capacity a year by the end of the decade, Reuters reported.

The move is a significant step forward in the company's mission to be a leading technology partner to support the global transition to net-zero carbon transportation, said Zhang Lei, CEO of Envision Group and executive chairman of Envision AESC.

"Our planned investment in a new gigafactory will form part of an ecosystem in the region, aimed at growing the local supply chain and developing whole life cycle opportunities of batteries. Our ambition is to develop advanced technology, future innovations and integrated net-zero solutions," Zhang said.

The company did not disclose locations or the amount of investment it will involve.

The new Envision AESC gigafactory in the US follows the company's confirmation in 2021 of plans to build gigafactories in France, Japan and the United Kingdom.

The company announced in 2021 it will build a $2.4 billion battery plant to supply French carmaker Renault in northern France, and invest 423 million pounds ($552.8 million) to build a gigafactory at the Sunderland manufacturing site in the UK, a move to expand its presence in Europe as the continent ramps up production to achieve battery independence.

By 2030, the company will achieve an annual production capacity of 24 GWh and has the potential to expand capacity by 40 GWh in Douai, France. It also pledged to create 1,000 local jobs by 2024 and 2,500 by the end of the decade. It said the investment in France will make its battery factory the first gigafactory in the country.

The company's expansion into France was in consideration of the country's economic scale, continuous investment in the green revolution and Sino-French economic ties.

Envision AESC has so far unveiled plans to build 10 plants in countries including China, Japan, the US, the UK and France, with the combined production capacity to reach 300 GWh by 2025.

With 2,500 employees, the company has produced power batteries for more than 600,000 electric vehicles in 44 countries over the past 12 years, with zero accidents, it said.

Analysts said major Chinese makers of EV-use lithium batteries have been setting up plants in Europe and the US in recent years.

BloombergNEF, a research provider covering global commodity markets, said China has dominated the global lithium-ion battery supply chain, with control of around 80 percent of the world's raw material refining, and the country will continue to dominate the supply chain through 2025.

China dominated BloombergNEF's second annual "Global Lithium-Ion Battery Supply Chain Ranking" released last year as well as its projection for 2026, thanks to continued investment and strong local and global demand for its lithium-ion batteries.

China had 80 percent of all global battery cell manufacturing capacity last year, with capacity expected to more than double to over two terawatt-hours, enough capacity for more than 20 million electric vehicles in the next five years, it said.

China's dominance of the industry is to be expected, given its huge investments and policies the nation has implemented over the past decade, said James Frith, BloombergNEF's head of energy storage, adding the next decade will be particularly interesting as Europe and the US try to create their own battery champions to challenge Asian incumbents already building capacity in both places.

Envision Group started its global journey by designing, selling and operating smart wind turbines and smart storage systems. In 2021, Envision Energy also ranked first in terms of the number of bids for wind power projects in the Chinese mainland.

The company announced it is committed to becoming carbon-neutral in its operations by 2022 and achieving carbon neutrality in its entire value chain by 2028. China's corresponding goals are to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.

Since its first smart wind turbine began to generate clean electricity in 2008, the company has put more than 12,500 wind turbines into operation, with a cumulative output of more than 150,000 GWh of clean electricity, cutting emissions by the equivalent of 100 million metric tons of carbon dioxide by April 2021, it said.

The company has been exporting offshore and onshore smart wind turbines to countries including Argentina, France, India, Kazakhstan, Mexico and Indonesia to support their green energy transition. It has established engineering centers and research and development facilities in the US, Germany, Denmark, Singapore and Japan.

Envision alone commissioned more than 10 GW in 2020, as those facilities abroad reached 0.28 GW with exports to countries such as France, Mexico and Argentina.