It has just been reported that Chinese electric car manufacturer, Li Auto is placing great emphasis on battery R&D, particularly in the area of 5C supercharged batteries.
Li Auto not only conducts in-depth independent research and development in chemical systems, structural design, and core BMS algorithms, but also demonstrates decisiveness in investment decisions. Li Auto collaborates with Sunwoda on numerous projects, and each time, after confirming the required costs with Sunwoda, Li Auto makes investment decisions promptly.
Li Auto has assembled a battery R&D team of more than 200 members. Industry insiders said president Ma Donghui closely tracks the project, reviewing progress roughly every two weeks. One source noted that the company is heavily focused on 5C ultrafast charging batteries, where it is deeply involved in chemistry, structural design, and battery management system (BMS) algorithms.
“Li Auto and SEVB are pushing forward many battery R&D projects. For almost every one, after calculating the costs with SEVB, Li Auto decides to invest without hesitation,” the source said.
Analysts suggest that setting up a JV with SEVB strengthens the legitimacy of Li Auto’s self-developed battery, which can now officially carry the company’s brand label.
Chairman and CEO Li Xiang has previously outlined three categories of supply chain collaboration:
- Self-developed and self-produced: Fits the company’s values and strategy, with no mature supplier available. Examples include range extenders, electric drive systems, and smart components.
- Self-developed and outsourced: Fits the company’s values and strategy, but mature suppliers exist and can sometimes deliver higher quality.
- External procurement: Does not fit the company’s values or strategy, but the market is mature enough, such as with bumpers and mirrors.
The new JV falls into the first category. Li Auto has created similar entities for other core parts, such as Huixiang for electric drives and Sike Semiconductor for silicon carbide components.
Although batteries are widely adopted, they remain one of the most expensive components in an EV, accounting for 30–35% of total cost. As a result, they are central to any supply chain strategy.
Li Auto also announced a five-year strategic cooperation agreement with CATL. For Li Auto, diversifying partnerships is part of a broader strategy: once a carmaker reaches sufficient scale, controlling costs and securing supply requires working with multiple battery partners.
By the way, did you know that on the 30th of July 2024, Li Auto managed to raise USD1.1 billion (RM 4.6 billion) during its initial public offering (IPO) on Nasdaq.
Also, there are strong hints that a Malaysian automotive group is ready to start working with Li Auto on an ASEAN sales push.
GACO Auto Team
