CHINA REPORT
The joint venture between Weichai Power and BYD has started construction on its factory, which has attracted widespread attention and has quickly become a hot topic in the industry. On Nov. 3, 2023, in Shandong Province, the Weichai (Yantai) New Energy Power Industrial Park project, a joint venture between Weichai Power and BYD, officially began construction.
Project plans call for the creation of a research and development and manufacturing base for batteries, motors, electronic controls, and electric drive assemblies that run through new energy commercial vehicles.
After the project is put into operation, the direct beneficiaries will include Weichai New Energy Commercial Vehicles under the Weichai Group and located in Yantai.
May 12, 2023, Weichai Power and BYD signed a strategic cooperation agreement in Shenzhen to jointly produce power batteries in Shandong.
According to public information, the settled in Fushan District, Yantai City. The project is divided into three phases, covering an area of approximately 1700 acres, and is divided into two parts. One part is a research and development and manufacturing base for power batteries, which will have an annual production capacity of 50GWh.
The other part is a manufacturing base for other core components of new energy vehicles, which will be built by Weichai in cooperation with BYD, After completion, it will have an annual production capacity of 500,000 flat wire motors, 400,000 electric controls, and 50,000 electric drive assemblies.
Source: Sohu Read The Article
PSR Analysis: At present, the penetration rate of new energy for trucks in China is only 5%, and the penetration rate of new energy for construction logistics trucks with a high degree of electrification is also less than 10%, even though the commercial vehicle electrification market has great potential.
The establishment of a joint venture factory between Weichai Power and BYD provides strong support for Weichai in the field of new energy powertrain, and also directly benefits the new energy vehicle business of Weichai’s new energy commercial vehicles. The new energy powertrain will achieve localized matching, and its overall quality, reliability, economy, and brand competitiveness will also be significantly improved.
As a leader in the fields of traditional fuel engines and commercial vehicles, Weichai urgently needs to make changes in the face of the new energy wave.
BYD has a layout in core components such as commercial vehicles, batteries, and electric drives, which can fill the gap of Weichai. For BYD, it is also possible to leverage Weichai’s strength in the field of commercial vehicles to coordinate the development of its truck and bus businesses, while also fully integrating battery supply into the Weichai system. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
