Aleees (KY-5227) has signed to a joint venture factory construction contract, licensing its production technology. In addition to its current production of lithium iron phosphate (LFP), Aleees has officially entered the NCM/NCA market. The factory has started its construction, and is expected to reach a production rate of 15,000 tons per year in 2018, and is expected to double the production rate in 2019. Achieving its annual production goal of 30,000 tons per year and becoming the first international company in China to produce both LFP and NCM/NCA. Aleees stated that their investor in Guizhou is looking forward to speed up the construction of the factory, even went further by asking the company to plan for a long term production goal 60,000 tons per year. Aiming to catch the upcoming wave of Chinese electric car sharing economy in 2019.
Top LFP Production Company to Enter NCM/NCA Market
It is projected that the number of electric cars in China will reach 2 million in 2020. According to current estimates, China will have 40% high annual growth. However, due to current limitations in electric cars and the difficulty of getting license plates, the cost of buying and maintaining a car in Chinese cities remains expensive. Hence generates the huge demand for car sharing businesses. Not only did Aleees kept its original investment in its LFP production line, it has also invested in NCM. NCM has higher power density, safer, cheaper, and smaller size. Making it a shining star in the automotive industry. It is highly possible that a boost in demand for NCM will happen in the near future.
Guian New District and Hong Kong’s FDG Electric Vehicles Plan to Invest Around USD 300M in Support of Aleees’ Expansion in the Chinese Market
Strong requests from Aleees’ customers, both in LFP and NCM/NCA, are pushing for quicker expansion for higher production rate in top tier companies like Aleees. Demand in LFP is already at 10,000 tons per year. Considering Aleees’ Taiwan factory only has a 2,500 tons per year production rate and China’s market demand, Aleees decided to invest in its expansion in Guizhou, China instead of Taiwan. Aiming to achieve a production rate of 12,000 tons per year to satisfy needs from customers in the electric bus and power storage markets.
The spotlight on this investment is that Aleees, for the first time, has entered a market with more demands, the NCM market. Aleees will push for 9,000 tons per year production rate in NCM in 2018, and 18,000 tons per year production rate in 2019. Satisfying needs from customers in the electric car market. The new NCM/NCA production will allow Aleees’ customers to enter the electric car market, generating another growth. The new production also allows Aleees to switch its business model by starting technical service as a source of income. Hence opening a new page in Aleees’ company progress.
According to market forecast, NCM/NCA has around 80,000 tons in demand this year. And double in demand in 2018 due to expected growth in electric cars. Reaching a demand of 240,000 tons in 2020. In addition, the demand for LFP is expected to be at 40,000 tons in 2017. LFP batteries are still expected to be used in electric buses in the near future, and the power storage market still has room for growth. Therefore, the demand for LFP batteries is expected to grow 25% annually, reaching 85,000 tons in demand in 2020.
The government of Guian New District stated that Aleees is the second key Taiwanese company that has successfully moved in to the area. The first one being Foxconn. At the same time, Aleees’ production and R&D (Research and Development) facilities are located right next to Changjiang EV, in an effort to help grow the Guizhou electric vehicle ecosystem. According to report, Foxconn currently has 20,000 employees in the Guian New District. Renowned companies such as Apple and Huawei have also set up offices here. Under the strong protection of the ecosystem, it is expected that the local development and construction in Guian New District will focus on big data and electric vehicle related industries.