Recently, BMW Group, Tesla, Volkswagen and other foreign auto brands have announced their plans to expand their production in China's auto production base, while strengthening cooperation with Ningde Times, Horizon, Hegang Group and other auto industry chain related enterprises.

Industry insiders said that with the accelerated integration of the global automotive supply chain, the new energy vehicle industry will enter a new round of innovation iteration cycle. China is not only in a leading position in terms of market capacity, but also leads the trend of global new energy vehicle technology innovation.

Accelerate the expansion of production base

Recently, it was reported that BMW Group would invest another 10 billion yuan to expand its high-voltage battery production center in Shenyang. In this regard, the relevant person in charge of BMW Group said that no more information was provided at present. The company continued to be optimistic about the development of China's new energy industry and strengthened cooperation with China.

In recent years, BMW Group has been accelerating the construction of its automobile production base in China. According to the public information, the largest production base of BMW Group in the world is BMW Brilliance Shenyang Production Base, which has two complete vehicle plants, i.e. Dadong and Tiexi, one powertrain plant and one research and development center.

It is understood that at present, the reconstruction and expansion projects of BMW Brilliance Tiexi New Plant and Dadong Plant are under way, and the annual capacity of the entire production base will gradually increase to 650,000 vehicles after completion and operation. The second phase of BMW Brilliance Power Battery Center is also about to open, which will take the lead in mass production of BMW's latest fifth generation BMW eDrive power battery.

In addition, in June this year, BMW Group officially opened its third complete vehicle factory in Shenyang production base, Lida Factory. The total investment of this project is 15 billion yuan, covering an area of 2.9 million square meters. After completion, it will have four production processes: stamping, body, painting and final assembly.

China is not only favored by foreign traditional automobile brands, but also "relied on" by Tesla, the "number one player" of global new energy vehicles. Tesla Shanghai Super Factory is Tesla's first overseas factory. Elon Musk, CEO of Tesla, said earlier that "Tesla has produced more than 3 million cars, one third of which are made in China."

"Shanghai Super Factory is Tesla's main export center, supplying cars to most markets outside North America. The production speed of Shanghai Super Factory in the third quarter exceeded the previous quarter's production record." The relevant person in charge of Tesla told the reporter.

Tesla has also recently accelerated the expansion of its Shanghai super factory to increase production capacity. Tesla disclosed in the financial report of the second quarter of 2022 that after the expansion of the Shanghai super factory, the annual production capacity will exceed 750000 vehicles, becoming Tesla's largest super factory in the world.

According to the data from the environmental information disclosure platform of Shanghai enterprises and institutions, the production line optimization project of Tesla Shanghai Super Factory was completed in September this year. The optimization of the production line is mainly to expand the stamping workshop, body workshop, painting workshop, assembly workshop and logistics operation center.

Tesla said that the project will increase the production capacity by increasing the working hours, the number of employees and the frequency of material turnover. It is estimated that 4000 new employees can be added after the optimization of the production line.

The insiders said that China's advantages in human resources, land, raw materials and other resources are one of the important reasons for attracting foreign auto brands to invest in the early stage of factory building. With the rapid development and maturity of China's automobile industry chain, the formation of multiple automobile industry clusters represented by Shanghai, and the rise of the huge automobile consumer market, the cooperation between major foreign brands and China has become increasingly close and diversified, and China has become an important pole of the world's automobile industry.

Carry out industrial chain cooperation

In addition to building factories and making cars in China, strengthening cooperation with Chinese automobile industry chain enterprises is the new trend of the development of major foreign automobile brands in the near future.

On October 13, Volkswagen Group announced that its software company CARIAD would establish a joint venture with Horizon to speed up the development of advanced driving assistance systems and auto drive system for the Chinese market. Volkswagen Group plans to invest about 2.4 billion euros in this cooperation. The transaction is expected to be completed in the first half of 2023.

Ningde Times, the leader of China's power battery industry, is the object of cooperation among major foreign brands. In August this year, Ningde Times announced the construction of the second European factory in Hungary - Debrecen Factory, which is close to Mercedes Benz, BMW, Volkswagen and other complete vehicle factories.

Xue Fuming, a member of the board of directors of Mercedes Benz Group and the chief technology officer in charge of R&D and procurement, said: "Ningde Times will provide the next generation electric vehicles produced in Europe with battery cells that have excellent performance and meet the carbon neutral standard, in response to our localization procurement strategy based on local conditions. Mercedes Benz has also become the first and largest customer of the new factory in Ningde Times under the initial capacity scale."

On September 9, Ningde Times and BMW Group announced that they had reached a long-term agreement. From 2025, Ningde Times will supply cylindrical batteries for pure electric vehicles of BMW Group's "new generation" model architecture. It is reported that the above battery products will be produced in two battery factories in China and Europe of Ningde Times, each of which can supply BMW with an annual capacity of 20GWh.

In August this year, BMW Group also signed the Memorandum of Cooperation on Building a Green Low Carbon Steel Supply Chain with HBIS Group, announcing that HBIS Group's low carbon automotive steel will be gradually used in mass production from 2023, and will gradually transition to green automotive steel based on hydrogen metallurgy technology in 2026, so as to reduce carbon dioxide emissions in automobile production and achieve green low carbon production.

CITIC Securities Research News said that with the accelerated integration of the global automobile supply chain, the new energy automobile industry will enter a new round of innovation iteration cycle, and the new formats and models represented by battery materials, battery structure and innovation models will further drive the industry to accelerate its development. Among them, the supply chain of Chinese companies has global competitiveness and advantages in production capacity, technology, cost, customers, etc. It is expected that they will fully enjoy the dividend of industry growth, and there will be huge growth space in the future.

Leading the global innovation trend

After just a few decades of development, China has become an important global automobile manufacturing and exporting country. The data shows that in the first three quarters of this year, China's auto enterprises exported 2.117 million vehicles, a year-on-year increase of 55.5%, exceeding the total auto exports in 2021. In August, China's automobile export volume surpassed Germany and leaped to the second place in the world after Japan.

In recent years, the independent brands represented by BYD have continued to exert themselves on the new energy automobile track. Data shows that in the first three quarters of this year, BYD's retail sales of new energy passenger vehicles were about 1.153 million, surpassing Tesla's global delivery of 908600 new energy vehicles in the same period. Since this year, BYD, Great Wall Motors and other independent brands have accelerated "going to sea", and new energy vehicles have landed in Southeast Asia, South America, Europe and other overseas markets.

The rapid growth of automobile exports is inseparable from China's strong automobile production supply chain system, especially with the acceleration of global automobile electrification transformation, the advantages of China's relevant industrial chains are increasingly prominent.

Power battery is the core component of new energy vehicles. At present, the world's largest power battery capacity is mainly distributed in China. The latest data shows that nearly two-thirds of the top 20 enterprises in the global power battery market are Chinese enterprises. Power battery enterprises represented by Ningde Times and BYD not only have advantages in production capacity and market share, but also lead the development direction of power battery industry technology.

The volume utilization rate of Kirin battery launched by Ningde Times can reach up to 72%, which can achieve a vehicle's endurance of more than 1000 kilometers, reducing the endurance anxiety during the use of new energy vehicles. In addition, new battery technologies such as solid state battery, sodium ion battery and hydrogen fuel cell, and domestic enterprises such as Ningde Times, Yiwei Lithium Energy and Honeycomb Energy are also accelerating their research and development.

BMW Group Chairman Qi Puce said, "In the past decade, China has established a strong industrial foundation of sustainable technology. Whether it is solar energy, wind energy or high-voltage power batteries, China not only takes the lead in market capacity, but also leads the global innovation trend."

"If a technology is scaled up in China, it can be applied in the world on a large scale. We have witnessed this in the development of the new energy vehicle industry. China has become the world's largest new energy vehicle market for seven consecutive years, and will continue to be the main driver of sustainable travel." Kipce said.