Two Chinese manufacturers of energy storage systems and batteries are considering investments worth hundreds of millions of dollars in Vietnam, according to industry and government sources.
The combined value of the investments could surpass $1 billion, according to one person with direct knowledge of the discussions.
Vietnam has become an increasingly popular destination for Chinese companies to start or expand manufacturing projects due to its array of free trade deals and cheap labor.
Xiamen Hithium Energy Storage Technology, a startup currently expanding in Europe and the U.S., has engaged with Vietnamese officials and industry managers to explore the possibility of investing up to $900 million in constructing a plant on over 30 hectares of industrial land, said the source.
If the investment is finalized at that amount, the company would become one of the largest foreign investors in Vietnam.
A second source familiar with the discussions said the potential investment would be worth at least $500 million.
The sources were not allowed to speak to the media and declined to be identified.
Hithium, based in Xiamen, China, said in a statement to Reuters that it had no new deals near closing. It also said it plans to expand its production capacity from the current 15 GW to 70 GW by the end of this year.
A separate source familiar with the discussions also said Growatt plans to expand in Vietnam.
Growatt, a manufacturer of battery systems and energy storage inverters for residential and commercial use, did not respond to requests for comment.
Both companies are in talks with multiple authorities and industrial parks about potential locations for their plants, the sources said.
Vietnam’s renewable market is growing as its booming economy struggles with frequent power cuts due to rising demand, climate change, and an inadequate power grid. Despite these circumstances, Vietnam has not yet enacted legislation that permits the use of energy storage facilities to strengthen its power network.
The global stationary energy storage market is estimated to increase in value to roughly $224 billion by the end of the decade, compared to just over $31 billion in 2021, according to Precedence Research. Major companies in the market include Tesla, Panasonic and Philips.