Following the Volkswagen Group’s investment in Guoxuan Hi-Tech, another German automobile giant, Mercedes-Benz, has recently joined the “competition” for Chinese battery companies. Just last weekend, Funeng Technology (Ganzhou) Co., Ltd. (hereinafter referred to as "Funeng Technology") announced that in the company's Science and Technology Innovation Board IPO to be completed in July, Mercedes-Benz's A wholly-owned subsidiary, Daimler Greater China Investment Co., Ltd. (hereinafter referred to as "Daimler Greater China") will participate as an important strategic investor. Its payment amount is 904.5 million yuan, and it will hold Fu in the future. About 3% of Neng Technology’s shares.
It is worth mentioning that Mercedes-Benz’s subsequent “official announcement” on the matter also revealed that the two parties also signed a comprehensive business cooperation agreement, and Funeng Technology will It will provide batteries for Mercedes-Benz’s new electric vehicle lineup to be rolled out globally over the next decade. According to the agreement, the two parties will also jointly develop and industrialize leading high-energy-density batteries. Through a closer partnership, Lingfuneng Technology's advantages in power battery R&D and production will be further unleashed. In addition, Funeng Technology plans to establish battery production plants in the EU and the United States, and will be designed as a carbon-neutral factory from the beginning.
“Daimler Greater China’s strategic investment in Funeng Technology’s IPO and the long-term supply partnership between the two parties demonstrate Funeng Technology’s leading battery technology strength and the importance of its global role.” Funeng Technology Dr. Wang Yu, Chairman and President, said: "We look forward to further in-depth cooperation with Mercedes-Benz to provide sustainable battery supply guarantee for its excellent products to support its electrification strategy."
Compared to Guoxuan High-tech, which Volkswagen Group has a stake in, and CATL, the "industry leader" in power batteries, Funeng Technology does not seem to be that well-known. So, what exactly are the advantages of this company that Mercedes-Benz sees?
According to public information, in 2002, Wang Yu, a Ph.D. from the Technical University of Lisbon, founded the American Farasis Energy Company in Silicon Valley, USA. In 2009, he returned to China to found Funeng Technology and transformed the American Farasis Energy Company into a new type. The industrialization of lithium manganese oxide power lithium-ion battery technology is mainly engaged in the production of high-tech, new energy, and automotive power lithium-ion battery systems, and provides power battery accessories for new embedded electric vehicles.
According to data, Funeng Technology’s power battery installed capacity in 2019 was 1205.6MWh, ranking 7th in China’s power battery installed capacity. It ranked 7th and 5th respectively in 2017 and 2018. Compared with CATL, which accounts for 51% of the market, the size of Funeng Technology, which accounts for 1.95%, does not seem to be outstanding.
However, in the field of soft-pack power batteries, Funeng Technology’s product shipments and installed capacity ranked third in the world and first in China for two consecutive years in 2017 and 2018. Moreover, Funeng Technology is also the company that has achieved mass production of the first batch of ternary soft pack power batteries in China.
Currently, Funeng Technology’s major domestic vehicle enterprise customers include Germany’s Daimler-Benz Automotive Industry Group Co., Ltd., Beijing Foton Daimler Automobile Co., Ltd., Daimler Greater China Investment Co., Ltd., Great Wall Motor Co., Ltd., BAIC Group, etc. As of the end of 2019, it has provided products and services for more than 125,000 new energy vehicles. In September last year, Funeng Technology won a large purchase order to supply Daimler, which undoubtedly laid the foundation for this investment.
Previously, Funeng Technology has completed 4 rounds of financing, including 5 billion yuan in Series C financing in 2018. Funeng Technology has 46 registered shareholders, including Guo Venture Capital, Guoke Investment, Guoxin Fund, National Development and Reform Commission Guidance Fund, Industrial Bank, Bank of Communications, BAIC Industrial Investment, etc.
On May 20, Funeng Technology has successfully registered on the Science and Technology Innovation Board and will be listed in the near future. Funeng Technology plans to raise approximately 3.437 billion yuan for a lithium-ion power battery project with an annual output of 8GWh (Funeng Zhenjiang Phase III Project) and supplementary working capital projects to solve the current problem of insufficient production capacity.
It should be pointed out that although they are “not popular” in China, soft-pack batteries are booming in the international market. In 2019, among the top ten new energy passenger cars in global sales, the number of soft-pack battery packages increased to 4. Global soft-pack power battery companies LGC, SKI, AESC, etc. have equipped a number of mainstream models for Volkswagen, Audi, Nissan, Hyundai-Kia, General Motors, Renault and other car companies. Among them, the famous Nissan Leaf uses Soft-pack power battery. Since its launch in December 2010, total sales have exceeded 500,000 units.
The so-called soft pack battery is a name compared to the two hard-shell batteries, cylindrical and prismatic. Its internal composition (positive electrode, negative electrode, separator, electrolyte) is the same as that of prismatic and cylindrical lithium batteries. The difference is not big. The biggest difference is that soft-pack batteries use aluminum-plastic composite film as the casing, while square and cylindrical batteries use metal materials as the casing.
In short, soft-pack batteries have high energy density (the average cell energy density of ternary soft-pack power batteries that have been widely produced in mass production has reached 240-250Wh/kg, while the ternary soft-pack power batteries with the same material system have a high energy density. Yuanqing power battery has an energy density of 210-230Wh/kg) and good safety performance (if it encounters thermal runaway, it can release heat through flatulence, and will not cause safety hazards due to uneven internal temperature and stress distribution caused by the winding production process) , large capacity and small internal resistance, flexible cell size and shape design and other advantages.
Of course, despite the above advantages, soft-pack batteries also have shortcomings such as more complex processes, low grouping efficiency and higher costs, especially the self-contained ternary soft-pack power battery cells. The protection is poor and it is easy to be punctured in extreme situations. Therefore, a metal protective layer needs to be added to the battery pack to provide more protection, which will increase the cost.
Domestic vehicle manufacturers still have great doubts about the quality control and service life of soft-pack batteries. In addition, prismatic hard-shell batteries have more advantages in integration efficiency and cell thickness. In addition, it is difficult for soft-pack batteries to compete with mainstream manufacturers such as CATL in terms of raw material prices. These factors have limited the expansion speed of soft-pack batteries in the domestic market.
In recent times, in order to ensure the stable supply of power batteries and comprehensive control of future technology routes, mainstream automobile manufacturers have been continuously expanding their battery partners and investing more deeply in them through equity participation. Participate in technology research and development, and Daimler Greater China’s investment in Funeng Technology this time is precisely to carry out the development and industrialization of high-tech battery technology and vigorously improve cost competitiveness. The technical focus includes increasing energy density and shortening charging time. It takes time to achieve a significant increase in driving range.
It is worth mentioning that Mercedes-Benz has cooperated with many power battery companies such as BYD, Everview Lithium Energy, CATL, South Korea's LGC, South Korea's SKI, and Funeng Technology, and has A power battery production network consisting of up to nine factories will be deployed around the world, and a relatively weak battery company like Funeng Technology may be a better choice for Mercedes-Benz (to gain a greater say).
This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.