Exclusive | China’s Tianqi is looking at a lithium plant in Europe to supply electric car batteries
- Company is in discussions to co-invest in battery materials and battery production in Europe, Frank Ha Chun-shing says in exclusive interview
“We hope the potential cooperation will allow us to better meet market needs, and allow Tianqi to expand into downstream operations in the battery supply chain,” Frank Ha Chun-shing, the chief executive of the Chengdu-based company, said in an interview with the Post in Hong Kong.
The rush to Europe underscores the strategy by Chinese carmakers to localise their supply chain closer to their market and to avert import tariffs and minimise logistics cost. The battery is the most expensive component of an EV, so locating battery materials, battery production and EV assembly close to each other would save transport costs, Ha said.
Last year, the US Inflation Reduction Act stipulated that joint ventures with Chinese battery makers in which the Chinese government has a 25 per cent or greater stake would be ineligible for subsidies or tax credits.
“We have moved our focus to Europe, where there is no such limitation,” Ha said. “Europe has also become an important market for us because of the size of its car market and the progress on low-carbon energy transition there.”
In addition, EU policies incentivise foreign firms to invest in battery and related material facilities there, he added.
The EU last year also passed legislation that requires declarations and caps on the carbon footprints of EVs, e-bikes and rechargeable industrial batteries.
Also phasing in starting next year: requirements on recycling efficiency and increasingly strict targets on the recovery of critical materials including cobalt, lithium and nickel.
From February 2027, each new EV and industrial battery with a capacity over 2 kilowatt hours sold in the EU must carry a QR code that allows consumers and supply-chain participants to identify it and check who produced the battery or handled its materials, from mining to final product.
Tianqi mulls lithium-ion recycling
It will also seek to invest in potential lithium mining projects in Austria, Northern Europe, the UK, Portugal and Spain, where various mines are under feasibility studies.
“We are looking for opportunities,” he said. “If the policies and geopolitical relations are favourable, we may take one or two of them.”
On Wednesday, Tianqi said that it expected to swing to a first-half net loss of between 4.88 billion yuan (US$661 million) and 5.53 billion yuan, from last year’s 6.45 billion yuan profit. It cited lower product prices and lower profit from its Chilean lithium mining unit.
Tianqi considers Hong Kong for R&D
The fully automated plant, which began operations in December 2022, was the first processing facility of its kind in Australia.
“The Chinese and Australian governments have chosen our company as the only Chinese investor in Western Australia for Premier Li to visit, a reflection of the importance of the new energy industry,” Ha said.
Meanwhile, Tianqi plans to set up a research centre outside mainland China. It is considering doing so in Australia, the UK and Japan, Ha said. However, Hong Kong would also be a good location for researching next-generation technology such as solid-state batteries in collaboration with universities and EV makers, if the government offers incentives to set up, he said.
