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In order to promote the popularity of electric vehicles, Honda Technology Research Industry Co., Ltd. announced the signing of a strategic cooperation agreement with Ningde Times, a power battery supplier, which will supply Honda with power batteries. At the same time, Honda will also take a stake in the Ningde era, with a 1% stake in the Ningde era when the deal is completed.

On July 10, Honda officially announced that Honda and Ningde Times have signed a comprehensive strategic cooperation agreement on new energy vehicle power batteries to strengthen the promotion of electric vehicles and accelerate the strategic partnership. This strategic cooperation will cover the joint development, stable supply, recycling and other areas of power batteries.

At the same time, Ningde Times also announced the signing of a strategic cooperation agreement with Honda. The announcement shows that during the validity of the agreement, the company will guarantee the supply of the agreed types of batteries to Honda on certain commercial preferential terms. Honda said that Chinese-made Honda new energy vehicles equipped with Ningde era power batteries are expected to first launch to the Chinese market in 2022.

The announcement also said that the two sides agreed to jointly develop power batteries and cooperate on joint research on future basic technologies; the two sides will also jointly study the feasibility of recycling agreed types of waste batteries from the market by the company or Honda, as well as the feasibility of recycling waste batteries to produce lithium raw materials, or cascade utilization of power batteries.

In order to strengthen cooperation and lock in battery supply, Honda decided to buy a stake in Ningde era. According to the Ningde time announcement, Honda subscribed for the non-public offering shares of the Ningde era through its domestic subsidiary Honda Technology Research Industry (China) Investment Co., Ltd., accounting for about 1% of the company's total share capital after the non-public offering. Honda will continue to hold Ningde Times shares for five years after the agreement is signed.

In February, Ningde Times applied for a non-public offering of shares to raise funds, which was approved by the China Securities Regulatory Commission on June 30. Ningde Times intends to issue no more than 220 million new shares, raise no more than 19.7 billion yuan, and issue no more than 35 targets. The funds obtained from this non-public offering will be used for power battery research and upgrading and capacity expansion projects in Ningde era.

Among the power battery installations in China in 2019, Ningde era power battery installed capacity reached 31.71GWh, accounting for 51% of the market share, making it the largest power battery supplier in China.

In order to lock in the supply of power batteries and continue to develop in China, the world's largest consumer market for electric cars, a number of foreign car companies have taken stakes in Chinese battery companies. In May, Volkswagen Group officially announced that it would invest 1.1 billion euros (8.7 billion yuan) in battery maker Guoxuan Tech, taking a 26% stake in the battery maker and becoming its majority shareholder. In early July, Mercedes-Benz announced that it would take a stake in Funeng Technology, a Chinese maker of power battery batteries, investing tens of millions of euros in exchange for a stake of about 3%.

In addition, Toyota and BYD have formed a joint venture to jointly develop pure electric models for cars and low-chassis SUV, as well as power batteries for these products. Future products will use the Toyota brand and are scheduled to be launched in the Chinese market by 2025.

A number of foreign car companies have taken a fancy to Chinese power battery companies and invested heavily, which will help to promote their electrification strategy in China and improve their competitiveness in the world's largest new energy vehicle market. Of course, the move also reflects China's leading position in power battery technology and market application.

However, the great challenge is that the sales of new energy vehicles in China have continued to decline, entering the stage of stock competition ahead of time. According to the China Automobile Association, sales of new energy vehicles in China in June were 104000, down 33.1% from a year earlier, down 33.1% from January to June, down 37.4% from a year earlier.

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