China’s power battery sector booms
Improvement still needed in crucial materials, core technologies
China’s power battery sector has grown quickly in the last few years, mainly driven by the global swell in output capacity of newenergy vehicles (NEVs), with the overall production capacity forecast to surpass 100 gigawatt hours by 2020.
However, experts said that industry problems such as an excess of low-end power batteries and lack of crucial materials, system integration technology and industry standards need to be resolved to further facilitate domestic battery makers’ global competitiveness.
Contemporary Amperex Technology Ltd (CATL), a leading lithium-ion automotive battery manufacturer based in Ningde, East China’s Fujian Province, is representative of China’s power battery manufacturers.
Established in 2011, the company focuses on the design, manufacturing, marketing and recycling of rechargeable lithium-ion battery cells, modules, packs and systems for commercial vehicles, passenger vehicles and energy storage.
After five years of development, the corporation’s domestic market share increased to 21 percent in 2016, Pan Yao, a new energy industry analyst at the domestic high-tech industry website portal OFweek, said at a conference on Monday in Shenzhen, South China’s Guangdong Province.
Currently, CATL is ranked in the top three of the global lithium-ion automotive battery industry, with a capacity to produce 6.8 gigawatt hours of batteries in 2016, according to a statement it sent to the Global Times on Monday.
It predicted that its output capacity would reach 50 gigawatt hours a year by the end of 2020, guaranteed by its highly automated and intelligent battery manufacturing facilities. Unlike leading global power battery manufacturers such as South
Korea’s LG Chem Ltd and Samsung SDI, CATL adopts nickel manganese cobalt batteries in passenger cars, with lithium-iron phosphate batteries mainly used in its electric buses and energy storage sector, Liu Yong, secretary-general of Energy Storage Applications Branch of China Industrial Association of Power Sources, told the Global Times on Monday.
The company showcased its advanced technologies, including a 48V pack for mild hybrid powertrain, plug-in hybrid electric vehicles (PHEV) battery system, fast-charging products and large-capacity cells for electrical vehicles at the Battery Show Europe in Sindelfingen, Germany, from April 4 to 6.
In the PHEV application, for example, CATL has an up to 10C high power battery as well as high capacity. The battery has a groundbreaking high-energy density and an outstanding product life of up to 3,000 times, compared with its competitors.
CATL CTO Robert Galyen told the Global Times on Monday that the firm invests 5 percent to 6 percent of its annual sales revenue in R&D and plans to inject 30 billion yuan ($4.36 billion) into upgrading its R&D and production capacity. The company runs three R&D centers globally, including one in Berlin, Germany.
Besides CATL, domestic market leaders include Hefei-based Guoxuan High-tech Power Energy Co, Tianjinbased Tianjin Lishen Battery Joint-Stock Co and Shenzhen-based BYD Co, said Wang Jingzhong, deputy director general of the China Battery Industry Association.
Major domestic battery manufacturers’ technologies are on the same level as LG Chem Ltd and Samsung SDI, though their technology is still catching up to that of Japan’s Panasonic, Wang told the Global Times on
Tuesday.
Skyrocketing demand
China’s power battery market has boomed in the past two years, with power battery output soaring 82 percent year-on-year to 30.8 gigawatt hours in 2016, data from industry website gg-lb. com showed in February.
The rapid growth of the power battery industry is mainly due to the massive rise of NEV output capacity across the world, Liu said. In 2016, 507,000 battery-powered electric and plug-in hybrid vehicles were sold in China, up 53 percent year-on-year, data from the China Association of Automobile Manufacturers showed.
Newly added investment in the power battery sector has reached 100 billion yuan since 2015, and the number of manufacturers grew three times to nearly 150 from around 50 at the end of 2014, Beijing-based Workers’ Daily reported in December 2016.
However, many companies are blindly expanding output rather than focusing on R&D, resulting in the slow progress of battery technologies, Liu said. He noted that China still lags behind the advanced international level in core materials, system integration technology, automatic manufacturing, industry standards as well as battery recycling.
The Ministry of Industry and Information Technology, together with three other government agencies, released a guideline in March on boosting the development of the power battery industry, setting a production capacity goal of 100 gigawatt hours by 2020, supported by high-end automatic equipment and widespread use of new materials.
Crucial materials such as positive and negative terminals, battery membrane and electrolyte and components should reach the highest international level, upstream industries must realize balanced development and key
innovative enterprises with core competitiveness will be formed by 2020, according to the guideline.
Wider usage
At present, power batteries are mainly used for public facilities such as buses, freight cars and street cleaning vehicles, Liu said.
“Power batteries will be widely used in passenger cars only if costs are reduced, battery security and life are improved and fast-charging technologies are making new breakthroughs,” he said.
Domestic power batteries can be applied for everyday use when their capacity is enhanced to above 300 kilometers from the current level of about 100 to 200 kilometers, Wang explained.
According to the national plan, the capacity of lithium-ion battery systems will achieve 260 watt hours per kilogram and the cost will be reduced to below 1 yuan per watt hour from the current level of over 2 yuan per watt hour.
“This is tough task for battery manufacturers, given the rising prices of materials such as copper, nickel and lithium phosphate,” Liu noted.
Wang forecasts that a slight industry readjustment will come in 2017, with companies that enjoy comprehensive advantages in price, technology and security growing rapidly.
“Finally, there will be just 10 or 20 large power battery manufacturers left, which will realize large-scale production and invest more in R&D,” he said.
With the emergence of new materials and advanced battery management systems, the security and cost of power batteries will definitely make great progress over the next few years, Wang said. Market valuation for lithium-ion batteries is expected to reach $26.7 billion by 2022, with an annual compound growth of 31.6 percent, data from China Battery Enterprise Alliance
showed in January.