Xinyang Maojian (362.HK) – The new darling of EV giants
A surge in electric vehicle (EV) sales to meet net-zero climate targets requires an immediate scale-up of EV battery production. In 2021, electric car sales increased more than 100% to 6.6 million, representing close to 9% of the global car market and more than tripling their market share from two years earlier. According to International Energy Agency (IEA), the rapid electrification of the transport sector means there is a need for an immediate expansion of battery manufacturing and related supply chains.
Ilka von Dalwigk, policy manager at the European Battery Alliance, expects the gap between EV demand and battery materials to be more severe in coming years. The EV batteries market is expected to reach $175.1 billion by 2028, at a CAGR of 26% during 2021-2028, according to Meticulous Research.
To tap into the EV battery market, Xinyang Maojian Group Limited (“Xinyang Maojian”)(362.HK) has entered into a project corporation with Mudanjiang Xuri New Material Technology Co., Limited to jointly produce raw materials of electrolyte for lithium batteries of EV. The project is expected to have an annual production capacity of 6,600 tonnes of ethylene sulfate, perfluoro-tert-butanol and 1,3-cyclohexanedione, the product serves as key raw materials of electrolyte for lithium batteries of electric vehicles, bringing an expected profit of RMB240 million to the project.
It is just the right timing for Xinyang Maojian to tap into the market. In Jan 2022, EV sector said to see CATL exit trend. There have even been cases where companies have changed to completely different battery suppliers. Chinese automakers have begun to reduce their dependence on CATL batteries one after another. This is the aftermath of unstable product supply, due to a significant increase in CATL customers in the last few years. It further indicates the soaring demand of the EV batteries in the market.
The EV battery boom does not only bring extra profits to the EV battery manufacturers, but also the opportunities of being acquired by EV giants. Acquisition activities in the EV battery market has been on a particularly impressive run. In May 2021, Ford Motor (NYSE: F) was increasing its investment in EV battery start-up Solid Power with hopes of starting to integrate the next-generation batteries into its EV. In Nov 2021, Tesla(NASDAQ: TSLA) confirmed acquisition of a Colorado-based battery startup, SilLion, Inc.
The increasing M&A activities has reflected the strong demand of EV batteries among EV manufacturers. Possessing the capacity to produce raw materials for EV batteries, Xinyang Maojian is set to become the new target for EV manufacturers seeking vertical integration.
Ilka von Dalwigk, policy manager at the European Battery Alliance, expects the gap between EV demand and battery materials to be more severe in coming years. The EV batteries market is expected to reach $175.1 billion by 2028, at a CAGR of 26% during 2021-2028, according to Meticulous Research.
To tap into the EV battery market, Xinyang Maojian Group Limited (“Xinyang Maojian”)(362.HK) has entered into a project corporation with Mudanjiang Xuri New Material Technology Co., Limited to jointly produce raw materials of electrolyte for lithium batteries of EV. The project is expected to have an annual production capacity of 6,600 tonnes of ethylene sulfate, perfluoro-tert-butanol and 1,3-cyclohexanedione, the product serves as key raw materials of electrolyte for lithium batteries of electric vehicles, bringing an expected profit of RMB240 million to the project.
It is just the right timing for Xinyang Maojian to tap into the market. In Jan 2022, EV sector said to see CATL exit trend. There have even been cases where companies have changed to completely different battery suppliers. Chinese automakers have begun to reduce their dependence on CATL batteries one after another. This is the aftermath of unstable product supply, due to a significant increase in CATL customers in the last few years. It further indicates the soaring demand of the EV batteries in the market.
The EV battery boom does not only bring extra profits to the EV battery manufacturers, but also the opportunities of being acquired by EV giants. Acquisition activities in the EV battery market has been on a particularly impressive run. In May 2021, Ford Motor (NYSE: F) was increasing its investment in EV battery start-up Solid Power with hopes of starting to integrate the next-generation batteries into its EV. In Nov 2021, Tesla(NASDAQ: TSLA) confirmed acquisition of a Colorado-based battery startup, SilLion, Inc.
The increasing M&A activities has reflected the strong demand of EV batteries among EV manufacturers. Possessing the capacity to produce raw materials for EV batteries, Xinyang Maojian is set to become the new target for EV manufacturers seeking vertical integration.