CNGR to End Investment in Nickel Joint Venture with Posco Amid Weak EV Market

Posco

China’s CNGR will liquidate its joint venture with South Korea’s Posco due to slowing electric vehicle demand.

Chinese battery materials producer CNGR has decided to terminate its investment in a nickel refinery joint venture with South Korea’s Posco Holdings. The joint venture, Posco CNGR Nickel Solution, will be liquidated as part of CNGR’s efforts to reduce investment risks and protect investor interests. This decision comes amid a slowdown in the global electric vehicle (EV) market, which has impacted the demand for battery materials.

Slowing EV Demand Leads to Strategic Adjustments

The global EV market has seen slower growth in 2024 compared to the previous year, which has affected the demand for battery materials like nickel and lithium. According to South Korean market intelligence firm SNE Research, the slowdown in EV sales has resulted in reduced battery installations. This trend prompted CNGR to reassess its joint venture with Posco, leading to the decision to dissolve the partnership.

Joint Venture and Production Facility Plans

CNGR and Posco first announced their joint venture plans in June 2023, aiming to build a production facility in Pohang, South Korea. The facility was designed to produce 50,000 tonnes per year of nickel sulphate and 110,000 tonnes per year of lithium-ion battery precursors. The plant was expected to support the production of batteries for 1.2 million EVs. However, with the weakening EV market, CNGR has chosen to withdraw from the venture to avoid further exposure to the slowing demand.

Conclusion

The termination of the joint venture with Posco marks a strategic shift for CNGR in response to the challenges facing the EV market. As demand for EVs continues to fluctuate, companies in the battery materials sector are re-evaluating their investments to mitigate risks and ensure financial stability.