GAC Aion has set up a subsidiary with a registered capital of over CNY 1 million for in-house battery R&D and production. This exerted pressure on GAC Aion's current battery supplier China Lithium Battery Technology Co., Ltd.(CALB), resulting in a 35% sharp dive in its stock price.
On Oct 27, GAC backed NEV automaker Aion announced the establishment of Yinpai Battery Technology Co., Ltd (hereinafter referred to as Yinpai), a new-born subsidiary co-held by GAC Aion, GAC Motor, and GAC Business with a registered capital of over CNY 1 billion (USD 138.69 million). Yinpai features industrial construction of in-house battery R&D, production and sales.
GAC Aion stated that battery stands as the power source for NEV and the core component associated with manufacturing costs. Whether an automaker can achieve self-control of core technology such as power batteries and relevant industrial chain under uncertainties including pandemic resurging, supply chain problems and rising energy costs is deemed as a key competitive advantage.
As a result, the stock price of Aion's current battery supplier CALB plunged 35% on Oct 27, the same day when GAC Aion made the announcement. Having a penetration rate of approximately 70% for GAC Aion's products, CALB views GAC Aion as an important client. From 2019 to 2021, revenue from GAC Aion accounts for 26.6%, 55.1% and 51.9% respectively CALB's total revenue.
In fact, GAC Aion has been arranging in-house battery R&D and production with a strong technical reserve. In March, trial production lines for Aion's in-house batteries were under construction, expected to cover a full manufacturing process from stock preparation to downstream battery pack production and be put into full operation by the end of 2022.