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A lion set to roar?

An emerging unicorn from China bets on battery breakthrough

Chen-Liquan-w

WeLion’s 82 year-old Chen Liquan

When Mao Zedong died in 1976, one of the first people to benefit from China’s subsequent re-engagement with the outside world was a middle-aged physics researcher from the Chinese Academy of Sciences (CAS) called Chen Liquan.

After winning a place as an exchange scholar at the Max-Planck Institute in West Germany, Chen was assigned to study crystal growth.

Shortly after his arrival in Europe, Chen noticed that the lab was pioneering the study of lithium nitride as a potential base material for solid-state batteries to replace lead acid. He was so excited by this discovery that he successfully switched his studies to super-ionic conductors.

On his return to China in 1978, he took the technology back with him, helping to set up a solid-state lab at the CAS Institute of Physics. Some years later, he also taught Zeng Yuqun, founder of China’s largest electric vehicle (EV) battery manufacturer CATL. 

Today Chen is 82 years-old but it hasn’t stopped him becoming a leading light at one of China’s newest unicorns, WeLion, which has seen its valuation soar from Rmb2 billion to Rmb15 billion ($2.4 billion) in the space of just a year, according to 36Kr.

The company that he founded alongside two other CAS colleagues Yu Huigen and Li Hong is not only a competitor to CATL, but also hoping to achieve pioneer status in commercialising solid-state batteries.

As we wrote in WiC506, leading auto and battery companies have spent many years trying to develop safer, more efficient alternatives to the lithium-ion and ternary batteries currently used in electric vehicles. In particular, the industry wants to replace the flammable liquid electrolytes between a battery’s anode and cathode with solid non-flammable alternatives. Featuring as a potential fire risk is never a good look for a car battery, after all.

Then there is the continuous search for ways to improve a battery’s energy density (getting more energy per unit of space) so that EVs can run for longer distances without a new charge.

It’s a similar concept to the one that drives semiconductor design for increasingly powerful computers and electronics applications, which demand ever more transistors onto ever-smaller chips.

Solid-state batteries should achieve this objective by being smaller and lighter than lithium-ion ones. The removal of the sloshing electrolyte cuts down the size, while the replacement of lithium-infused graphite in one of the electrodes with pure lithium reduces the weight.

However, one major challenge with the technology is its short shelf life. Solid-state batteries have a tendency to warp after repeated charging, so it has taken longer than expected for the design to move beyond the lab.

One pioneer, Toyota, now hopes to commercialise the battery technology by the middle of the decade, while Samsung SDI is building a pilot production line in South Korea.

There are also a number of US companies working on solid-state designs including Sakuu, QuantumScape and Solid Power, which all have commercialisation roadmaps for the next few years.

Can WeLion beat them to the punch? It has a few factors in its favour. China has carved out a strong position as the world’s leading EV battery producer and WeLion also boasts a backer with a track record as an industry disruptor, the carmaker NIO. Indeed, one of the reasons why WeLion has caught the attention of the Chinese media is because its major shareholder is linked to NIO founder Li Bin (19.15% stake). Other rinvesors include phone makers Huawei and Xiaomi.

NIO confirmed this month that WeLion is developing a semi solid-state battery to be rolled out in its forthcoming ET7 model by the fourth quarter of this year. The company claims that the battery will have a 1,000km range, thanks to its energy density of 360Wh/kg. By comparison, Tesla’s Model 3 battery holds about 260Wh/kg.

Back in 2017, WeLion’s Chen told a scientific journal in the UK that whoever grabs the first opportunity in solid-state lithium batteries will have a great opportunity to lead the sector. He then added, “previously we have been largely following foreign developments. But if we start research early on solid lithium batteries, we could be ahead of the field.”

The development of solid-state batteries may also help to solve an ongoing debate inside China about the respective merits of charging stations or battery swapping stations. Right now, one of the biggest downsides of buying an EV, aside from the higher purchase price, is the length of time it takes to recharge the car’s battery. As such, NIO stole a march on its rivals by coming up with its BaaS (Battery-as-a-service) solution. This allows owners to regularly swap their vehicle’s battery for a new one at one of the 1,002 charging stations it had built in China by the end of 2021.

This year, it has a target of 1,300 similar stations globally and has opened its first international one in Norway, which has the world’s highest per capita EV ownership. Germany is next in line.

Batteries with a longer range make it less of an imperative to roll out charging or battery swap stations. Nevertheless the Chinese government set a target in January of enough charging points around the country to service at least 20 million vehicles by 2025. At the end of last year, there were 2.6 million points, up 70% year-on-year, according to the China Electric Vehicle Infrastructure Promotion Alliance. The Ministry for Industry and Information Technology (MIIT) also wants 1,000 swapping stations in place by 2023 and is trying to standardise battery systems.

This has been one reason why various companies, most notably Tesla, have sounded dismissive about the future of battery swapping stations. They each have their own proprietary battery technologies and don’t want to lose that edge by harmonising standards so that any car can use any battery swapping station.

The world’s filling stations also have to decide how to transition from diesel and petrol pumps to electric chargers and battery swap facilities. Foreign fuel retailers operating in China are also trying to set up joint ventures to grow their footprints against much bigger domestic incumbents like Sinopec, which runs China’s biggest domestic network and plans to install 5,000 charging points by 2025. Late last year BP signed an agreement with Aulton, a provider of energy services to electric vehicles, to roll out battery swap stations, for instance. Shanghai-based Aulton isn’t as well known internationally as NIO but it has slightly more battery swapping stations and it has been operating for much longer as a company (since 2004, in fact, when it was known as Dianba New Energy).

The company was founded by Zhang Jianping, the self-styled Thomas Edison of China, and has agreements with 20 domestic car manufacturers to produce models with swappable EV batteries. Its customer list encompasses all the big state-owned giants, including SAIC, Chang’an and FAW.

Last September, it closed a Rmb1.5 billion funding round led by Sinopec’s Enze Fund. NIO is an existing investor too. Two months later, it announced the joint venture with BP, based in Guangzhou. The two plan to use this business as a springboard to expand into other cities.

Likewise, Shell signed an agreement for battery swap stations with NIO in 2021. In late March it did another deal for charging stations with BYD, covering China and Europe.  The two plan to offer membership access to BYD customers to charging points across the UK energy giant’s vast European network, as well as a new network in China, starting in Shenzhen but growing quickly to 10,000 charging points initially.

China Daily welcomed the deal as another indication of “China’s status as a leading centre of EV”.

BYD underlined that again this week when it announced that it had stopped producing vehicles powered only by fossil fuels in March and is now focusing exclusively on electric and hybrid cars.

The Chinese press celebrated once again, this time in highlighting that BYD is the first traditional auto manufacturer anywhere in the world to drop fuel-combustion engines, as well as the only company with an end-to-end solution for electric vehicles incorporating batteries, computer chips and the cars they’re installed in.

BYD also claimed another new record for Chinese carmakers after reaching monthly sales of 104,338 electric passenger vehicles in March, up 161% year-on-year.


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