China's burgeoning electric car market is driving growth at injection press maker Tederic Machinery Co. Ltd., part of a wave of business that Chinese plastics equipment suppliers say they're getting from manufacturers of alternative fuel vehicles.
Tederic recently won a contract to supply 628 molding machines to China's largest electric vehicle maker, BYD Automobile, which the machinery company valued at about 500 million Chinese yuan ($69 million).
In an interview at Tederic's booth at K 2022, Chairman Terry Zheng said it's part of an estimated 3 billion yuan ($410 million) investment that BYD is making in plastics molding machines, as it seeks to address its capacity problems.
Electric cars have become a major market for Tederic, as more traditional markets have softened, he said.
"This is an opportunity for Tederic for the next 10 years," Zheng said. "It's not a one- or two-year business. It will be a 10-year business for us."
In September, the Chinese press maker announced the BYD contract, saying it would supply presses in 10 of BYD's 13 factories around China by yearend. It said clamping forces of the machines range from 85 to 1,920 metric tons. That included 450 Neo·E all-electric machines for lighting and beam bars, 103 Neo·H two-platen machines for interior and exterior trim, and 75 Neo·M and Neo-Mv multimaterial two-platen models for trim components.
"Before, such parts were made by Japanese machines, like JSW, or were made by KraussMaffei or Engel machines and so on," Zheng said, arguing that Tederic has focused on technology upgrades.
Other Chinese molding machine makers have announced contracts with the carmaker this year.
Chen Hsong Holdings Ltd. (Hall 14, B43), for example, announced a 350 million yuan ($48.2 million) deal in March with BYD. China's largest press maker, Haitian International Holdings Ltd. (Hall 15, A57), has said it's supplying machines to the electric car company. Warren Buffett's investment fund owns a stake in BYD.
As well, in September, Guangdong Yizumi Precision Machinery Co. Ltd. (Hall 13, C77) disclosed a 300 million renminbi ($41.4 million) order and said the investment in electric vehicles in China has meant "dramatic growth" in contracts for injection machine suppliers.
Other metrics point to the green car market blooming in China this year.
Electrics accounted for 24 percent of new car registrations in the country in the first half of the year, according to the International Council on Clean Transportation.
By contrast, electric vehicles — both battery electrics and plug-in hybrids — accounted for 19 percent of new registrations in Europe and 7 percent in the United States, although the U.S. had the fastest percentage growth of the three, albeit from the smallest base, ICCT said.
BYD reported selling 641,000 new energy vehicles in the first half of the year, a 314 percent increase from 2021, Yizumi said in its announcement. "New energy vehicle" is a Chinese-government term that refers to battery electrics, plug-in hybrid electrics and fuel-cell electrics that are eligible for public subsidies.