The Battery Industry in China

The seminar will involve the following two presentations, in conversation.

Xieshu Wang, Zhao Wei

Specialized Vertical Integration: Value Chain Strategy of Power Lithium-ion Battery Firms in China

Within a short period of time, China has developed a full-fledged industrial value chain for EV batteries. The policy of infant industry protection is often regarded as the origin of industrial dynamics. However, more empirical observation from the field shows that the value chain strategy of firms can also provide answers to the question why the rapid formation of a complete and dynamic battery value chain has only taken place in China so far. Our study explores the driving forces behind the emerging Chinese EV battery industry. It analyses strategic moves of actors along the battery value chain and identifies that a strategy widely adopted in the Chinese firms can be described as “specialized vertical integration”. This unique approach typically represents the strategy of resource-based view of firms, creates an internal dynamism of the EV sector in China and contributes to its competitive advantage in the global value chain.

Stephane HEIM, Kosuke KAKITANI, Jaeho LEE, Hiromi SHIOJI –
Speaker: Stephane Heim

The competition patterns and dynamics of the Chinese Li-ion battery industry

The Chinese Li-ion battery industry for EVs kept expanding during the past decade with the emergence of several Chinese large and smaller battery manufacturers controlling the market. This success is often attributed to the Chinese central and local governments’ industrial policies, regulations, and incentives schemes that provided stable industrial conditions. However, we need to consider the innovation, organizational and corporate strategies, and the rules of transactions and competition these suppliers followed, in order to assess the market dynamics and competition patterns in this industry in its still early stage of development. Besides, at least since 2020, traditional car makers and new entrants such as tech giants have been investing hugely in the EV market, indicating that new market dynamics are underway. Against this backdrop, the question that addresses this presentation is how Chinese battery makers gained control over key strategic resources of the Li-ion battery industry, structured the industry, defined and controlled its competition rules, and in turn what their first-mover advantages are. We will see that this industry’s current competitive dynamics are articulated around three core principles that gave a competitive advantage to the Chinese makers: an industrial segmentation based on different battery chemistries, the in-house development and production of strategic technologies, and the bargaining power of suppliers following customization and diversification of transactions.

Online at:

https://us02web.zoom.us/j/84636222109?pwd=SXIrZWszUWNFRHZCMDBPK2JScG0rZz09

Meeting ID: 846 3622 2109
Passcode: UW9tnn
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