Building batteries isn't just a technical challenge for automakers.

        Improving automakers' bargaining power isn't an easy task, and even aspiring to build their own batteries comes with certain "barriers to entry." Recently, someone on an investor interaction platform asked CATL: "Now that major automakers are starting to invest in establishing their own battery R&D facilities, what’s the company’s view on this trend, and what measures are being taken to address it?" In response, CATL emphasized that automakers and battery manufacturers have distinct areas of expertise: while automakers excel in fields like mechanical and electronic engineering, battery production involves complex electrochemical systems—areas where automakers typically don’t possess the same depth of understanding as specialized battery companies.
Specifically, the research and development and production of power batteries involve cutting-edge scientific advancements—not only in material innovation (such as high-nickel, high-silicon, and solid-state batteries) but also in structural innovations (like CTP, CTC, and AB batteries). Moreover, at the manufacturing level, these processes must meet the stringent standards of battery "lighthouse factories" to ensure product safety. According to CATL, the company’s products now achieve a failure rate as low as one in a billion. So, for new-energy vehicle manufacturers, is the only hurdle standing in their "battery journey" merely a technological barrier?
Guangqi Group is currently one of the major automakers actively expanding into the power battery sector. Yuan Feng, Managing Director of Guangqi Capital, previously told reporters that the company entered the battery industry primarily because Guangqi’s growing sales of new-energy vehicles could already support the establishment of a dedicated battery enterprise. "Two years ago, when we were first focusing on new energy, we hadn’t considered entering the battery business," he explained. "At that time, our annual sales stood at just 20,000 units. But as sales gradually climbed to over 100,000 units, the idea still didn’t cross our minds—mainly because careful calculations revealed that producing batteries ourselves wouldn’t be economically viable at those volumes. However, this year, with Guangqi’s new-energy vehicle sales expected to reach 250,000 to 300,000 units, we realized there was a real opportunity to build our own battery company. That’s why we decided to take matters into our own hands—and announced our entry into the market in August," Yuan Feng added.
It is reported that from January to October this year, GAC Aion achieved cumulative sales of 212,400 vehicles, representing a year-on-year increase of 134% and surpassing its年初 target of 200,000 units for the entire year. However, even after crossing this milestone, automakers building their own battery plants will still face numerous challenges. Yu Qingjiao, Secretary-General of the Zhongguancun New Battery Technology Innovation Alliance and Chairman of the Battery 100 Forum, told reporters that, first, R&D costs will rise significantly. Moreover, improving product quality and scaling up production will take time, often resulting in self-produced batteries being less cost-effective compared to purchasing them externally. Additionally, establishing an in-house battery operation could divert automakers' resources away from core automotive businesses, potentially hurting their overall profitability. Currently, most new-energy vehicle businesses are operating at a loss, and many power battery companies are also struggling financially. Whether it’s manufacturing batteries or cars, both ventures demand substantial upfront investments with relatively long payback periods.
Gu Guohong, Vice President of the Qingdao Automotive Research Institute at Jilin University, stated that today, power battery cell products have become relatively mature, with energy density already approaching the physical performance limits of existing materials. As a result, development challenges and costs have risen exponentially compared to the past. Currently, the primary focus for major power battery manufacturers is scaling up for industrial production to reduce costs and further enhance performance.
As battery companies slow down their pace in boosting energy density, automakers' in-house battery plants may finally gain some catching-up opportunities. However, Mo Ke, chief analyst at True Lithium Research, believes that many automakers aren't actually chasing the absolute highest energy density right now—they're placing greater emphasis on battery quality, such as how consistent the batteries are across the board. After all, an electric vehicle today can sometimes achieve sales of around 100,000 units. This means that if you randomly select any two vehicles from a batch of 100,000, their battery performance should remain consistently reliable. Such consistency is a true test of manufacturing prowess, presenting a significant challenge for automakers. That’s precisely why building their own batteries isn’t just a technical undertaking—it’s a multifaceted endeavor that demands excellence in both engineering and production capabilities.

Translated from Sina Auto

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