Crafting NEVs with efficient supply chain in Yangtze River Delta

In China's automobile industry, the Yangtze River Delta is a key player in the field of new energy vehicles (NEVs). Encompassing Shanghai and the provinces of Zhejiang, Jiangsu and Anhui, the region accounts for over 40 percent of the country's NEV output, according to China Association of Automobile Manufacturers. In this region, a new vehicle is produced every 10 seconds.

Central to this industrial efficiency is the "four-hour industry circle," which leverages the geographic proximity of regions each specializing in different aspects of automobile manufacturing. Such specialization caters to the complex manufacturing needs of NEVs, which require a variety of components like electronic control systems and batteries.

At the same time, the integration of the region has cultivated a robust local supply chain network that enables sourcing of all essential components needed for manufacturing NEVs within a mere four-hour driving radius.

This synergy aligns with China's broader objectives, as recently highlighted at the Central Economic Work Conference in Beijing, which aims to enhance resource mobilization and foster high-quality development of key industrial chains in the manufacturing sector.

Innovations and collaborations fueling growth

Leading the charge in the "four-hour industry circle" is Shanghai, a high-tech metropolis. Companies like Horizon Robotics exemplify the city's dedication to developing essential automobile components like chips and software, which are integral to the vehicles' functioning.

Located approximately 200 kilometers west of Shanghai, the city of Changzhou is known for its power battery production. The city's power battery sector reaches 97 percent self-sufficiency in its industrial chain. According to Nanjing Customs, the city exported power batteries worth 4.98 billion yuan in the first 10 months of this year, marking a year-on-year increase of 55.8 percent.

"In 2018, when we started in Changzhou, we only had our technology – no customers, no sales revenue, nothing," recounted Wang Zhikun, executive vice president of SVOLT Energy Technology.

Five years ago, after relocating to Changzhou, the company initially faced challenges in establishing supply chain partnerships. However, thanks to the evolving industrial chain network in the region, the company has witnessed rapid growth.

"The efficient transportation network, comprehensive industrial system, and vast consumer market of the Yangtze River Delta have propelled us to growth," said Wang.

The company has developed the world's first cobalt-free battery, which is now in mass production. Traditionally, ternary (lithium) batteries, which are widely used in electric cars and mobile phones, rely on cobalt, a globally scarce metal, according to Wang.

"Facing the challenge of limited cobalt supply, we made a strategic decision to eliminate cobalt from our batteries. This shift addressed the supply issue and ensured a more secure and sustainable source of raw materials for our products," he said.

Located more than 200 kilometers south of Shanghai, the city of Ningbo in Zhejiang Province has carved out a niche in the manufacture of integrated die-casting molds, essential for constructing car bodies. The Beilun District in the city, home to over 110 companies focused on automobiles and key auto parts, reached an industrial output of over 100 billion yuan last year.

Driven by technological innovation, companies such as Zhejiang Huashuo Technology are enhancing manufacturing efficiency. The company has developed a method for one-time die casting for car motors, gearboxes and electric control gear shells, reducing production time to just a minute per shell set.

"Through integrated die-casting, we've transformed the rear floor of a vehicle model. A section that previously comprised 70 separate parts has been integrated into a single component," said Zhang Yupeng, the director of Die Casting Engineering Department of the company. "It simplifies production and reduces the vehicle's weight by nearly 13 percent, contributing to lighter and more efficient vehicles."

Stronger connections within industrial clusters

Anhui Province is a crucial component of the "four-hour industry circle," significantly contributing to vehicle exports. Its integration into the region's collective development strategy has led to the creation of strong overseas service networks, international logistics, and supply chain systems.

The cohesive development of the Yangtze River Delta has brought about a strategic shift in how companies operate. In Anhui Province, research and development personnel of companies can now be placed directly at car manufacturers' headquarters, streamlining the process of product development. This proximity allows for immediate on-site testing and rapid iterations, all under one roof.

For instance, a manufacturing engineer downstairs can now quickly team up with a software engineer upstairs to tackle any emergent issues, facilitating prompt and effective resolutions. This setup not only enhances the efficiency of the development process but also ensures a more collaborative and integrated approach to problem-solving in vehicle manufacturing.