The Surging Geely New Energy and Li Shufu's Realm of Power Batteries
After half a year, Geely took the lead in the industry to raise its annual sales target from 2.71 million vehicles to 3 million vehicles, an increase of 11%.
What supports Geely's decision to raise the sales target is nothing but the strong breakthrough in its new energy vehicle lineup. In the first half of the year, the cumulative sales of new energy vehicles, including Geely Galaxy, Lynk & Co, and Zeekr, reached 725,100 vehicles, a year-on-year increase of 126%. The doubling growth of new energy vehicles contributed more than half of the total sales of 1.409 million vehicles for Geely in the first half of the year.
The explosive growth of new energy vehicles in the short term has indeed allowed Geely to taste the fruits of its new energy transformation. However, the pressure on the system behind this growth has also increased accordingly. For example, the demand for power batteries from the emerging and booming new products has reached a critical level.
According to the latest batch of new vehicle announcements from the Ministry of Industry and Information Technology, for the three upcoming new energy models, Geely Galaxy A7, Galaxy M9, and Lynk & Co 10 EM - P, the declared battery cell suppliers include not only CATL, the largest battery supplier for Geely at present, but also Changan - CATL.
Yes! It is the joint - venture battery company between Changan Automobile and CATL.
Over the past few years, CATL has established battery joint - venture companies with many automakers, such as Geely - CATL, SAIC - CATL, Changan - CATL, GAC - CATL, etc. The core idea is that both parties jointly invest to supply batteries for their own new energy products. Logically, the batteries from Changan - CATL should be supplied to Changan's new energy vehicles.
However, due to the rapid development of Geely's new energy vehicles, the supply of power batteries has fallen behind, and Geely has to "borrow" Changan's batteries.
People outside the industry may wonder that Geely announced in April this year that it would integrate its battery supply chain system and establish a battery industry group, Jiyao Tongxing. Why is Geely still short of batteries?
At the end of May, Jiyao Tongxing held an ecological conference and announced that it would achieve a battery supply capacity of 70 GWh by 2027, which is equivalent to the consumption capacity of Geely's annual production and sales of 1.5 million new energy vehicles. Will Jiyao Tongxing help Geely achieve full self - supply of power batteries and become the next Fudi?
Is Geely short of batteries?
Entering the new energy vehicle market, the battery, a key component accounting for 30% to 50% of the total vehicle cost, has once become the core factor "constraining the neck" of the whole vehicle industry.
If the forecast is too high, the early investment will be wasted. If the forecast is too low, once a new model becomes popular, the period of supply shortage will be prolonged, and orders are likely to be snatched by competitors. Controlling the demand for batteries tests an enterprise's accurate prediction of new vehicle sales and its control over the elasticity of the supply chain. This balance really needs to be well - grasped.
In the past, many joint - venture automakers have suffered losses in battery supply. For example, a certain American joint - venture automaker overestimated the sales of its new energy vehicles, resulting in the idleness of the battery production line jointly built with CATL at a high cost, wasting hundreds of millions of yuan.
However, some automakers have a relatively conservative prediction of new models. As a result, once the models are launched, there is a shortage of supply, which is a "happy trouble" for the manufacturers. Since last year, Geely has encountered such situations twice. One was with the Geely Galaxy E5 during its first sales boom, and the other was with the Geely Xingyuan during its second sales boom.
In August 2024, the Galaxy E5 was launched. With its high cost - performance ratio and other advantages, it received wide attention from the market, and the order volume continued to rise. In the first month of its launch, the sales volume reached 12,000 vehicles and then continued to increase.
At that time, many consumers at the terminals reported that the delivery time for some models was relatively long. In fact, an important reason was the shortage of batteries and the supply chain.
According to the supporting plan, the preferred batteries for the Galaxy E5 come from Yaoning New Energy under Geely, and there is also supplementary supply from Honeycomb Energy. According to the information from Geely Yaoning's Jianhu base, which exclusively supplies the Galaxy E5, the production capacity utilization rate of the base reached 100% when the Galaxy E5 entered large - scale production.
In the first quarter of this year, the Yaoning Jianhu base delivered about 0.9 GWh of power batteries, which was basically just enough to meet the battery demand for the Galaxy E5's sales in one quarter. Fortunately, through supply chain coordination and production capacity adjustment at the vehicle production base, Geely solved the problem of supply shortage for the Galaxy E5.
If the Galaxy E5 was just the beginning of Geely's tight battery demand, then the launch of the Geely Xingyuan in October 2024 sounded the alarm for Geely's power battery shortage.
At that time, the Xingyuan was launched with a starting price of 68,800 yuan. With its excellent appearance, large space, and strong intelligence, it dominated the pure - electric sedan market under 100,000 yuan. In the first month of its launch, it sold 15,000 vehicles, and in the second month, it sold 20,000 vehicles.
Even with this delivery capacity, in 4S stores across the country, salespeople still had a large number of orders and customers waiting for delivery, and messages from users urging for vehicle delivery were constantly heard on social media.
Fortunately, as an established leading automaker, Geely has a very strong ability to mobilize the supply chain.
As Geely's largest supplier, CATL quickly coordinated with Geely and increased the production lines from 2 to 12 in just five months. This directly promoted the monthly sales of the Geely Xingyuan to rise from 20,000 to about 40,000 vehicles, and it won the sales championship of all - category models in the terminal market for several consecutive months.
Of course, Geely is not just relying on CATL. In fact, from the declaration information of the Ministry of Industry and Information Technology at the beginning of this year, it can be seen that Geely has included EVE Energy in the battery supply system for the Geely Xingyuan and made a declaration. On the one hand, it is for backup, and on the other hand, it is also beneficial for Geely to gain the initiative in the supply negotiation with CATL.
The strongest power battery "friend circle"
Actually, a diversified supply plan has always been the core of Geely's ability to compete and gain the right to speak in the supply chain. From this perspective, although Geely has once faced a shortage of battery supply, it is not short of power batteries.
On the one hand, Geely has a wide "friend circle" of power battery suppliers.
Looking at the new energy vehicle models declared by Geely from 2023 to the beginning of this year, the involved battery suppliers include CATL, Honeycomb, Guoxuan High - Tech, CALB, EVE Energy, and also its own Quzhou Jidian and Yaoning. Although Geely does not have a particularly strong self - supply ability of batteries, as the largest new energy automaker except BYD at present, it is not a problem for Geely to find sufficient power battery supply.
On the other hand, to achieve full - stack control, self - developed batteries are necessary. Even if they are not used, as the main automaker, one cannot afford to be ignorant.
In fact, over the past few years, while Geely has been booming in the fuel - powered vehicle market, it has been exploring the power battery field for more than a decade. Through various paths such as self - research and self - production, and introducing strategic partners, Geely has gradually built a complete industrial chain from raw materials, cell design, battery pack verification in real vehicles to battery recycling.
Judging from the investment, Geely has invested hundreds of billions in this business segment. What has this investment brought? According to incomplete statistics, in addition to Yaoning New Energy and Quzhou Jidian, the battery industry chain enterprises in which Geely holds shares also include Anchi New Energy, Yaoneng, Lixin Energy, Hengyuan New Energy, etc. Geely has also carried out investment cooperation with power battery enterprises such as CATL, Sunwoda, and Farasis. Its production bases and invested power battery projects are spread across many places in the country, including Wuhan, Yibin, Ganzhou, Zaozhuang, Yueyang, Yingtan, Chongqing, Tonglu, Yancheng, Quzhou, and Jianhu.
Actually, in the early days, on the one hand, Geely established Weirui Electric Vehicle Technology (Suzhou) Co., Ltd. and Weirui Electric Vehicle Technology (Ningbo) Co., Ltd. through its subsidiaries, mainly engaged in the three - electric system and PACK business. At the same time, in 2017, Geely wholly acquired the production equipment and the right to use the manufacturing technology intellectual property of LG Chem's Nanjing factory, promoting the development of Geely's battery technology.
Secondly, relying on Zhejiang Hengyuan New Energy Technology Co., Ltd. and Shandong Hengyuan New Energy Technology Co., Ltd. under the Hongqiao Group, which are mainly engaged in the production of lithium - ion battery cells, the products were initially used in the automobile products of Zhidou and Kangdi.
Thirdly, Geely took control of Qianjiang Motorcycle and extended to the commercial vehicle battery field through its subsidiary Qianjiang Lithium Battery, because Geely also has the task of new energy transformation and the demand for power batteries for its Remote Commercial Vehicle Group.
In the early stage of new energy development, both Weirui and Hengyuan provided relatively little supply and support for Geely's new energy power batteries. This part of the business only led Geely into the threshold of the power battery field. After all, achieving industry - leading levels in battery safety, cost, performance, reliability, etc. requires more effort than building a car.
Industry research shows that for a power battery enterprise to make a profit, the annual production capacity needs to be at least 20 GWh; to achieve relatively ideal operating efficiency, it needs to reach 40 GWh. To truly have market competitive advantages, it needs to cross the threshold of 100 GWh. For Geely, whose new energy business was not very strong at that time, self - developed batteries were obviously not as cost - effective as purchasing from outside.
Therefore, hitching a ride and cooperating with all battery suppliers in a wide - ranging way has become an important strategy for Geely in the power battery field. Except for enterprises like the leading CATL, which need to be treated with respect, perhaps in Geely's business logic, rotating bidding orders among different battery manufacturers, especially in cooperation with mid - and small - sized battery enterprises, Geely can bring more value to them than they can bring to Geely.
However, purchasing from outside does not mean that Geely's own battery - making ability has stagnated. In fact, the early R & D and accumulation of Weirui and Hengyuan in the battery field have provided many pre - conditions for Geely's subsequent independent control of new energy power batteries.
After careful study, Weirui has developed into Quzhou Jidian during the innovative development led by Zeekr. Its ultra - fast - charging lithium iron phosphate battery has been installed in many Zeekr products. Hengyuan has developed into Yaoning New Energy during Geely's industrial chain cultivation and the industrial investment of Li Xingxing, the son of Li Shufu. The Shendun short - blade battery is one of its products and has now entered Geely's new energy battery supply system.
In 2024, the two major battery enterprises under Geely, Jidian New Energy and Yaoning New Energy, achieved battery loading capacities of 6.27 GWh and 1.97 GWh respectively, with a total of 8.24 GWh, ranking among the top ten in China, surpassing LG New Energy.
The strongest power battery "friend circle"
Many automakers have complained about "working for battery manufacturers". Especially when the price of power batteries was high, the hard - earned money of automakers from making and selling cars became the profit of battery manufacturers. Especially for the absolute leading CATL, which automaker gets its batteries will have an advantage in new energy development.
However, in the current situation of industry involution and declining profits, almost every automaker is thinking about how to gain the initiative and the right to speak in the battery, one of the three major components of new energy vehicles, at least to be more flexible and calm.
At the Shanghai Auto Show in April this year, Geely announced the establishment of the Jiyao Tongxing Battery Group, focusing on the lithium iron phosphate short - blade battery route. It will comprehensively integrate all battery - related assets under Geely, including multiple battery companies such as Yaoning, Jidian, and Yaoneng, as well as all battery - related businesses, talents, and production bases. It will also deeply integrate its two technology brands, the Shendun short - blade battery and the Jinzhuan battery, into the "Shendun Jinzhuan Battery".
After the integration, Jiyao Tongxing has 8 major production bases in Tonglu and Quzhou in Zhejiang, Jianhu in Jiangsu, Ganzhou, Shangrao, and Yingtan in Jiangxi, Ningguo in Anhui, and Zaozhuang in Shandong. By 2027, it will form a production capacity of 70 GWh.