Between 2020 and 2025, China will dominate the lithium-ion battery supply chain in the world, a new report said.
Japan and South Korea were market leaders for much of the previous decade. But, according to the report from BloombergNEF, a research firm, China has already surpassed them.
China's success came on the back of its huge (72 gigawatt-hours) domestic battery demand, control of 80 percent of refining of the world's raw materials, 77 percent of the world's cell capacity and 60 percent of the world's component manufacturing.
According to BNEF, Japan and South Korea ranked second and third, respectively, this year. While both countries are leaders in battery and component manufacturing, they do not have the same influence in raw material refining and mining as China.
James Frith, BNEF's head of energy storage, said, "China's dominance of the industry is to be expected given its huge investments and the policies the country has implemented over the past decade. Chinese manufacturers have come from nothing to being world-leading in less than 10 years."
Based on refined demand, lithium-ion battery can be divided into power lithium-ion battery, energy storage lithium-ion battery and consumption lithium-ion battery.
With the development of the new energy industry and the rapid growth of the new energy vehicle sector, industry experts estimated that power lithium-ion battery will experience robust growth.
Data from the Power Battery Application Branch of China Industrial Association of Power Sources showed that in 2019, the accumulative installed capacity for China's NEV power lithium-ion battery was 62.2 GWh, up 9.3 percent year-on-year. There were 79 power lithiumion battery manufacturers in the sector, 13 fewer than the level in 2018, demonstrating a more intensified industry reshuffle.
However, Frith said that the next decade will be particularly interesting as Europe and the United States try to create their own battery champions to challenge Asian incumbents who are already building capacity in both places.
As EV demand grows there is an increasing need for cell manufacturing facilities close to automotive production. This has led to a boom in European cell plants, and the rest of the supply chain is also slowly making its way to Europe.
According to BNEF, if the US were to increase its investment in raw materials and promote EV adoption, it could overtake Japan and China to be No 1 in global lithium-ion battery supply chain in 2025.
To enhance competitiveness in the global lithium-ion battery supply chain, Chinese manufacturers are stepping up efforts.
In March, BYD unveiled its sub-brand FinDreams, which is supported by five subsidiaries. FinDreams Battery Co Ltd, one of the five subsidiaries, specializes in power battery manufacturing. The independent system offers the subsidiary with more autonomy to produce power battery.
According to FinDreams Battery, currently, it owns more than 4,000 research personnel and over 3,000 patents. In March, it launched a new blade-shaped lithium-ion phosphate battery. Industry experts said that the product, which features long life, high safety and high mileage, will help redefine industry standards and promote sustainable development of the industry.
The company said that in the future, leading enterprises in the power lithium-ion battery sector are expected to achieve better development in industry competition. To increase its global competitiveness, it will pay close attention to technology advancement and launch more advanced technologies and product solutions.
In terms of production capacity, currently, it owns battery production bases in Chongqing, Shenzhen and Huizhou in Guangdong province and Xining in Qinghai province.
Its yearly battery production capacity reached 60 GWh. The company has the ability to quickly respond to market demand and increase production capacity. With the growth of battery demand in the new energy sector, it will appropriately expand the scale of power battery production capacity in a timely manner, the company said.
Zhang Xiang, an automobile analyst at the Ministry of Industry and Information Technology, said that to maintain the competitiveness in the global market, Chinese lithium-ion battery manufacturers must step out of the domestic market and go global.
"In the first half of this year, China's growth rate of NEV sales slowed down, while that in the European market caught up. This is because the Chinese government has cut the NEV purchasing subsidy while the European government has increased the subsidy," he said.
Data from the Brussels-based European Automobile Manufacturers' Association showed that in the first half of this year, the NEV sales in the European market grew 52 percent year-on-year to 403,300 units.
"There are vast business opportunities in the European NEV market. China's production capacity for lithium-ion battery is excessive, and the only way to solve the problem is to go global. Chinese lithiumion battery has the advantage of low cost and high mileage, which offers it the advantage in global competition," Zhang said.
(Source: China Daily)
