Daimler's Gigafactories + The secret of export success + More rainfall predicted • China.Table

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Dear reader,

The city of Zheng’an produces six million guitars a year, which makes it something of a global market, considering it’s all produced in one place – even if the instruments are actually built over many small workshops. Thus, news agency Xinhua published a report on Zheng’an on Thursday. The reason: the pandemic has caused a rise in global demand for guitars, with the region seeing a 440 percent increase in sales.

What sounds like an overly specific detail actually stands for the secret of Chinese export success. And this is not only of particular interest for competing for export nations such as Germany, but for other emerging markets as well. The creation of production locations centered around individual product groups has proven to be enormously effective. When several companies are focused on a single place for the same product, in turn, all of them become stronger, Felix Lee analyses.

For weeks, there have been rumors about problems regarding Daimler’s cooperation with Chinese battery manufacturer Farasis. Chairman of the board Ola Källenius has now presented the company’s electric vehicles’ strategy for the coming years. Surprisingly early, the premium manufacturer no longer wants to rely on pure combustion engine cars anymore and instead is planning the construction of several large battery cell plants in preparation. Ambitious – and yet necessary because the Chinese competition is known to be setting a breathtaking pace in the transition to e-mobility. Our analysis reveals what this could mean for collaboration with Farasis.

Your
Finn Mayer-Kuckuk

Feature

Daimler plans new Gigafactories without Farasis

Daimler is doubling the pace of its electric strategy. The problem: this makes the Stuttgart-based manufacturer more dependent than ever on the reliable procurement of high-quality battery cells. Can Daimler’s Chinese partner Farasis deliver as promised? The company apparently has its doubts – and has now announced the construction of its own gigafactories.

Daimler’s entry into the electromobility market has been troublesome. In addition to a few hybrid models, the luxury-class manufacturer has so far only offered battery-powered versions of small-series vehicles and its Smart model. The Chinese competition is more than a decade ahead. Under pressure by Chinese authorities, Daimler jointly founded the Denza brand with domestic supplier BYD in 2012, but sales were never particularly high.

Now CEO Ola Källenius is picking up the pace. On Thursday, he and his management team presented the future of e-mobility at Daimler during a one-hour presentation. The company has once again accelerated the transition to battery-electric vehicles significantly. “The tipping point is approaching, especially in the luxury segment, where Mercedes-Benz belongs,” Källenius said. By 2025, not a quarter but half of all products will now be battery-powered. At the end of the decade, the age of the petrol engine will also come to an end at the company whose founder invented it.

However, this presents Daimler with considerable problems in the procurement of the needed batteries for its entire annual production. The company apparently may already manufacture its own batteries at its subsidiary “Deutsche Accumotive”. But they continue to purchase the core of their energy storage devices, the battery cell. Last year, the company announced that it was planning a battery factory in Bitterfeld in Saxony-Anhalt with its Chinese partner Farasis Energy.

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