Gem Co., Ltd. holds 3,700 battery patents, and to manufacture battery cells, precursor companies need to be provided with blueprints. With 1,600 research personnel, Gem Co., Ltd. invests billions of won annually.
Goal: "Unification of Precursor Materials"
Gem Co., Ltd. conducts research on 35 "uncharted" technologies, including core-shell protection layers. The company is also targeting the rapidly growing recycled battery market.
Gem Co., Ltd.'s headquarters in the Baoan New Center District of Shenzhen, China, resembles a university campus more than a corporate HQ. When visited at the end of last month, robots made from recycled electric vehicles welcomed visitors at the R&D center, renowned for its world-leading precursor and battery recycling technologies.
Inside the research facility, various advanced X-ray and scanning equipment, along with electron microscopes, were visible. Pan Hua, Vice President of Gem Co., Ltd., said, “Gem Co., Ltd. has gathered over 40 world-renowned scholars to research next-generation batteries. Last year, Professor Sun Xueliang from the University of Ontario, Canada, joined us.” Chinese-Canadian Professor Sun is considered one of the top experts in solid halide electrolytes used in solid-state batteries.
The Evolution of Chinese Precursor Companies
China's rise as the mecca of precursor materials, which account for about 70% of the manufacturing cost of battery cathode materials, is rooted in environmental pollution issues. The chemical reactions needed to process lithium and cobalt at high temperatures inevitably cause water pollution. This is why the U.S., which has attracted numerous battery cell manufacturing plants, remains lukewarm about hosting precursor plants. As a result, China, which is relatively lenient on environmental issues, has come to dominate the market. Companies like Gem Co., Ltd. and CNGR could only emerge in China.
The importance of precursors in the battery industry cannot be overstated. No matter how excellent a battery is developed, it cannot be commercialized without providing the precursor company with the 'recipe' for the cathode active material. The design blueprint must be shown to manufacture the precursor required by battery cell and cathode material manufacturers. This is why Chinese precursor companies hold the design blueprints for global batteries.
Chinese companies are now fervently developing their own technologies. Gem Co., Ltd. invested 1.45 billion yuan (approximately 275 billion KRW), about 5% of its sales of 30.5 billion yuan (approximately 5.73 trillion KRW) last year, into R&D, an unusual move for a precursor company. Pan said, “We hold 3,700 patents related to batteries.”
Gem Co., Ltd. operates six research centers across China, including its headquarters in Shenzhen, Wuhan, and Taixing. It also has one in Indonesia, where lithium mines are concentrated. The company employs about 1,600 R&D personnel. Pan explained, “We manage R&D personnel systematically, categorizing them as top talents, leaders, and advanced talents.” Gem Co., Ltd.'s founder and CEO, Xu Kaihua, is also a former researcher at Zhongnan University.
The Center of Next-Generation Battery Research
Gem Co., Ltd. is conducting 35 research projects, all pioneering uncharted technologies. Zhang Kun, the head of the Wuhan research center, explained that these projects include core-shell protection technology for battery active materials, '4th generation ultra-high nickel precursor' technology for lithium-ion battery cathode materials, and '2nd generation high-voltage precursor' technology to widen battery voltage ranges. These are technologies that even companies in Korea, the U.S., and Japan have not commercialized.
Zhang said, “Gem Co., Ltd.'s rise to the top was due to its continuous dedication to R&D over the past decade. We manufacture precursors cheaper than competitors thanks to our unique technology using dispersed sulfuric acid in production.”
The Next Target: Recycling Industry
Gem Co., Ltd. is also eyeing the recycled battery market. The company has facilities capable of processing 300,000 tons of recycled batteries in Wuhan and other locations. In 2020 alone, 500,000 tons of lithium-ion batteries were discarded in China. A Gem Co., Ltd. official said, “Our performance in processing recycled batteries has doubled every year over the past two years. The market will expand significantly in the next 5-10 years as electric vehicles flow into junkyards.”
China mandated battery recycling for manufacturers in 2018, requiring them to register in a system that tracks the life cycle and shares related data with government authorities. This system, similar to livestock tracking, allows for a comprehensive view of production and disposal.
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