China Battery-Maker Gotion Says War Shifts Focus to Clean Energy
(Bloomberg) -- Gotion High-Tech Co. Ltd., a major Chinese battery manufacturer, is seeing a renewed global focus on the green transition as fossil fuel disruptions due to the Iran war drive demand for clean-energy technology.
“Everyone is placing more emphasis on the new energy transition since the conflict in the Middle East” began, founder and chairman Li Zhen said in an interview with Bloomberg Television this week. Ongoing advancements in solar and wind, and cost improvements in batteries mean governments can “achieve self-sufficiency and not rely on fossil fuel supplies from a few countries,” he added.
Li’s comments come as the US-Israel war against Iran continues to snarl energy supplies and deepen worries about global inflation and energy security. Countries reliant on energy imports are accelerating the shift toward clean technologies, from solar and batteries to electric vehicles, mainly driven by businesses and consumers.
China’s exports of electric and hybrid vehicles more than doubled in March on a yearly basis, according to data from the China Passenger Car Association released this month. It’s an indication that individuals and industries are hunting for alternatives to traditional energy supplies. Ningbo Deye Technology Co., another energy storage maker, this month attributed a jump in its quarterly profit to stronger overseas demand driven by geopolitical risks.
Gotion, which counts Volkswagen AG as its largest shareholder, sees demand for energy storage systems — needed to ensure constant supply from renewable sources like solar and wind — growing to five times more than for EVs in the long run, Li said.
China’s energy storage industry has seen strong demand from power grids and data centers for artifical intelligence over the past year. Meanwhile, growth expectations for EVs have been dampened by intense competition and a slowing economy.
“The momentum in AI means it will require a lot of electricity, therefore more energy storage is needed. And that’s a huge opportunity for us,” Li said.
The Shenzhen-listed company’s shares have doubled over the past year.
Gotion seeks to build capacity of 100 gigawatt-hours each in the APAC and EMEA regions as well as the Americas in the next five years and double overseas shipments this year. Li said the Asia-Pacific region may see “faster demand growth.”
The Hefei-based firm also aims to boost domestic growth by 50% this year, he said.
Gotion, which supplies batteries to carmakers including Geely Automobile Holdings Ltd., has been stepping up overseas expansion in recent years, with factories planned in the US and Morocco, as well as one in Slovakia that is slated to start production by end of the year, according to Li.
However, the company has said it could not move ahead on plans for a $2.4 billion Michigan battery plant announced in 2022 because of a withdrawal of support from the US state and local partners. Top Chinese battery makers, Contemporary Amperex Technology Co. Ltd. and BYD Co. Ltd. have also faced backlash in the US due to security concerns and calls for supply-chain independence in Western countries.
“We must strive to improve our battery, and cooperate better with the American markets,” Li said, adding he believes Gotion can “help solve local employment problems, contribute to tax revenue and play a role in local economic development.”
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