Armed with low costs and high quality, Korean EV parts supplier A.F.W is looking to sell friction welded battery cathode terminals to CATL, the largest electric vehicle battery manufacturer in China, according to industry sources on June 24.
If the talks are successful, the deal is expected to be made via the joint venture scheduled to be established in July, the sources added.
Currently, China’s Kedali supplies the parts to CATL, but their prices are reportedly around 30% higher than what A.F.W can offer; the Korean manufacturer’s terminals are priced at 650 won ($0.56) as of 2017.
Friction welded cathode terminals are used exclusively for square batteries. They connect to the electrolyte within the battery cell. The terminals are bi-metallic, with the insides made of copper and the outside aluminum. Friction welding is used to weld the two together.
Friction welding is solid-state joining technique that welds workpieces by generating heat through mechanical friction. It’s the only way to weld copper and aluminum together.
When it comes to square batteries, CATL and Samsung SDI are the world’s two leaders. Both manufacture mostly large-sized batteries used in electric cars.
A.F.W has maintained close ties with Samsung SDI since supplying in 2009. It could further solidify its market position by adding CATL to its client list, according to industry watchers.
A.F.W’s assembly lines for friction welded battery terminals currently have a 70% operation rate. To prepare for future demand, the firm plans to invest 25 billion won to build its fourth plant in Daegu, a city about a two-hour drive away from Seoul.
The equipment will be deployed in Q4, with aim to begin operations in the first quarter of next year. In total, the annual capacity will climb to 75 million from the current 50 million, said those close to the matter.