Shanghai, 20 November (Argus) — Chinese battery producer Svolt Energy Technology plans to build a power battery plant in Saarland, Germany.

Svolt said that the plant’s battery capacity will reach 24GWh/yr, with demand from its European customers reaching 7GWh/yr as of June this year.

With total investment of €2bn ($2.37bn), the plant includes a module pack factory scheduled to start production as early as mid-2022, along with a cell module factory that will be completed and put into production at the end of 2023.

Svolt is targeting to reach 100GWh/yr of global capacity by 2025, including 76GWh/yr of Chinese domestic production, according to Svolt president Yang Hongxin.

The EU has renewed its focus on creating an independent battery supply chain in Europe by investing in battery projects across the continent over the past year. This progress will speed up this year in the wake of the Covid-19 pandemic, which has strengthened the importance of a domestic supply chain. This is expected to support long-term demand for power batteries.

The market share for electric vehicles (EVs) in the EU rose in this year’s second quarter, despite an overall year-on-year fall in passenger car registrations.

Global battery manufacturers and battery material producers are investing in domestic production bases to open up the European market. South Korean refiner SK Innovation plans to build an additional lithium-ion battery separator production line in Poland, while Chinese battery separator Senior will set up a wholly-owned branch and invest in a new lithium-ion battery separator plant in Sweden.

Svolt, formerly a subsidiary of Chinese auto producer Great Wall Automobile, set up a power battery arm in December 2016. It has operated as an independent firm since February 2018. The firm launched first phase production of 4GWh/yr at its power battery plant in Changzhou city in east China’s Jiangsu province in December last year.

EVs are expected to drive demand for cobalt, lithium, nickel and graphite in the coming years. Argus assessed prices for alloy and chemical grade cobalt metal at $15.55-16.10/lb yesterday, holding stable since 10 November. Discussions on long term-contracts are entering into their final couple of weeks, with most business being done in the chemicals sector.

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