The batteries will be built in China to serve the Chinese market
Energy giant Total’s subsidiary Saft announced on April 4 it has entered an agreement with Chinese battery manufacturer Tianneng Energy Technology (TET) to expand its e-mobility and energy storage business.
With the joint venture, in which Saft will hold a 40% interest, the firm seeks to expand its lithium-ion activity, as it will primarily focus on the development, manufacturing and sales of advanced Li-ion cells, modules and packs for Chinese markets, which are expected to represent over 40% of the global demand by 2025.
These batteries mainly produced for E-bikes and electric vehicles will be manufactured at the Changxing Gigafactory in the northwest of the Zhejiang province, and which holds a potential capacity of 5.5 GWh.
The JV will also focus on Energy Storage Solutions (ESS) as a target market in an industry where many firms are looking to future-proof their production as oil demand is expected to peak within the next two decades.
“This is a first strategic move driven by Total, following the acquisition of Saft in 2016, to grow Saft’s activity in China, the world’s largest renewables market, as well as in the ESS segment as an essential component to the large scale development of intermittent renewable energies,” said CEO of Total Patrick Pouyanne.
As part of this move, Total purchased electric utility company Direct Energie in 2018 in a US$1.7 billion deal, further strengthening its position within the renewable energy and gas power plants business. The firm hopes to reach customers all over France and Belgium in the next three years.
As demand continues to grow in the renewable energy market, both partners are planning to expand the facility to ramp up its production capacity.
“The JV will allow Saft to join forces with a Chinese partner, a world leading lead acid battery manufacturer, willing to develop its lithium-ion activities. It will also give Saft access to China’s booming battery market as well as highly-competitive mass production capacity to accelerate its growth,” Pouyanne added.