January 2022
China wants 20% of new car sales to be electric by 2025, with this share doubling to 40% by 2030, according to an action plan issued by the country's state council in October. With EV sales set to soar, the country’s demand for batteries is expected to skyrocket.

Given that China expects automobile sales of 30m by 2025, achieving the one-fifth target would mean sales of 6m new energy vehicles (NEVs). NEVs include battery-electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). China looks increasingly likely to achieve this target, given that 13% of new cars sold in the country last year were NEVs, up from around 6% in 2020.

China dominated global sales of NEVs in 2021, with sales skyrocketing to 3.5m, up 183% from a year earlier and exceeding the combined total of the previous three years. Sales were incentivised by government subsidies, which were extended in 2020 for a further two years, coupled with a swathe of new models and technological improvements.

AME expects sales to easily reach 5m this year on the continued rollout of new models, particularly small and inexpensive NEVs, that have gained popularity over the last few years. Chinese buyers will also seek to cash in on the final year of government subsidies for NEVs, which have been reduced by 30% and are set to be phased out at the end of the year.

China's power battery production reached 219.7GWh in 2021, soaring 163% from a year earlier, according to data from the China Automotive Manufacturers Association (CAAM). The country's installed volume jumped 143% to 154.5GWh.

China accounts for over 70% of global battery cell production capacity, driven by supportive government policies, large amounts of capital and engineering improvements. AME estimates that China has a battery production capacity of 332GWhpa.

By comparison, the IEA states that Europe's current production capacity is around 35GWhpa. However, AME has it pegged at a higher 56.6GWhpa. AME estimates that US capacity is currently around 54GWhpa.

China also accounted for the largest share of battery demand in 2020 at almost 80GWh, compared to 52GWh in Europe and 19GWh in the US, according to the IEA. Global automotive lithium-ion battery production was 160GWh in 2020, up 33% from 2019, the IEA estimates.

CATL, the world's largest battery manufacturer, plans to expand its battery production capacity to an extraordinary 1,200GWh by 2025, compared to 110GWh in 2020. The company supplies batteries to almost the entire global car industry, including Tesla, Daimler and Volkswagen.

By comparison, Europe could be producing 462GWh by mid-decade, according to Brussels-based non-profit Transport & Environment, and that's only if all 38 planned gigafactories in the region make it to production.

While Europe and the US are pressing ahead with ambitious plans to build up their battery production capacity to challenge China's dominance, the country's capacity is still expected to more than double, enough to supply more than 20m EVs, in the next five years.

 

CATL

CATL, which is controlled by Hong Kong’s richest tycoon, Robin Zeng Yuqun, accounted for 51.4% of China's installed power battery production capacity in January-November with 65.93GWh.

Including joint ventures, CATL currently plans to build or expand about 20 domestic factories and one in Germany, according to Chinese brokerage SooChow Securities. To fund the expansion, CATL said in August that it plans to raise as much as CNY58.2bn (US$9bn) through a private share placement. CATL's 30GWhpa battery cell plant in Yibin, Sichuan province, is expected to be completed in two years, with the first phase of 15GWhpa completed in June 2021. 

Meanwhile, the Chinese manufacturer struck an agreement with the city of Yichun, Jiangxi province, in September to build a new CNY13.5bn (US$2.09bn) li-ion battery plant. The production capacity and construction start date have not been disclosed, but the company said the facility is planned in response to strong market demand. CATL saw a 131% boost in net profit during the first half of 2021 to CNY4.48bn (US$692m).

A month earlier, CATL said it would build a new battery factory in Shanghai, in the same industrial park as Tesla's gigafactory. This is likely to mean that CATL will supply Tesla from this plant, which reportedly has an 80GWh capacity. Tesla is already a customer of CATL in China, using the Chinese manufacturer's LFP cells for the standard range versions of its Model 3 and Model Y EVs built in China.

CATL said in October it would build a CNY32bn (US$5bn) battery recycling plant in Hubei. CATL supplies EV batteries to a swathe of automakers including Tesla, Volkswagen and Geely.

 

 

BYD

BYD, which was founded in 1995 to make lithium batteries for consumer electronics, has since evolved into one of the biggest producers of batteries for EVs. BYD accounted for the second-biggest share, or 16.6%, of China's power battery installed capacity in the first 11 months of 2021, with 21.34GWh.

BYD has a CNY10bn (US$1.4bn) battery factory in Chongqing, southwestern Sichuan province, with a 20GWh capacity, which will reportedly reach 35GWh by the end of the year. It is currently the only plant that produces BYD's blade batteries, introduced in March 2020.

BYD also has a 2GWh plant in Huizhou, a 14GWh plant in Shenzhen (Guangdong), a 20GWh plant in Bengbu (Anhui), a 24GWh plant in Qinghai and a 30GWh plant in Xi'an (Shaanxi). BYD's current annual production capacity is estimated to be around 60GWh and is expected to reach 100GWh by 2022.

BYD's blade batteries can pack 50% more cells into a battery pack compared to conventional LFP batteries due to their long, thin shape (96cm long, 9cm wide). As a result, BYD says its Tang EV in Norway can reach a range of 400km on one charge—similar to a standard range Tesla Model 3 car. The blade batteries have a high longevity of 3k charging/discharging cycles or 1.2m km (nearly 750k miles) of mileage.

 

CALB

Chinese battery manufacturer CALB plans to expand its production capacity to 300GWh by 2025, up from the current level of 100GWh. CALB accounted for 6.1% of China's power battery installed capacity in January-September, with 5.64GWh. 

The company said in September it was planning a new CNY24.8bn battery factory in Hefei with a capacity of 50GWh. In April, it announced the construction of a 50GWh factory in Chengdu, as well as a new plant in Wuhan. Currently, the state-owned company has an R&D centre and three production sites in Changzhou, Luoyang and Xiamen.

CALB’s automotive customers already include GAC Aion, Changan Auto and Geely. In its September update, it said that it is in “discussions on technology development cooperation” with Volkswagen, Daimler and Great Wall Motor. In Europe, the company has joint ventures with ElringKlinger and Continental to supply li-ion battery cells.

 

LG Chem 

South Korea's LG Chem has two battery components plants in China. These include a precursor plant in Quzhou, Zhejiang Province, and an anode material plant in Wuxi. They are 100% powered by renewable energy from Chinese power companies.

 

Gotion High-Tech

Gotion High-Tech, 26% owned by Volkswagen, is aiming to expand its battery cell production to 300GWh by 2025. This marks a massive jump from the 28GWh production capacity recorded at the end of 2020.

The company said in July it would build a factory with VW in Hefei, which is located in the same province as VW's JAC Volkswagen, since re-named Volkswagen Anhui. The modular electric drive matrix (MEB) factory, which will produce VW's new unified cells, is expected to be completed by the end of 2022 and to start operations in 2023. It will deliver 150k battery systems a year for VW Anhui's EV models.

Volkswagen last year invested an additional EUR1bn (US$1.2bn) to increase its stake in JAC Volkswagen from 50% to 75%, and to acquire 50% of JAG, the parent company of its Chinese partner in JAC.

The company said in March it would invest CNY12bn (US$1.9bn) in battery recycling and raw materials production facilities for li-ion batteries in Hefei. Construction is expected to take 24 months. It said in August it would build two plants in Jiangxi province to produce a combined 100ktpa of lithium carbonate.

Gotion High-Tech accounted for 5.1% of China's power battery installed capacity in January-September, with 4.72GWh, making it the fifth-biggest supplier.

 

SVOLT

Battery cell manufacturer SVOLT, a spin-off from Chinese carmaker Great Wall Motors, plans to further expand its production capacity in China with a plant in Chengdu. The 60GWh plant is expected to cost CNY22bn (US$3.4bn), with CNY10bn (US$1.5bn) for the first phase.

SVOLT this month announced a planned 40GWh plant in Jintan District, Changzhou, Jiangsu province. It is expected to cost CNY15bn (US$2.3bn) and to be built in two stages. New factories are under construction in Huzhou in Zhejiang province and Suining in Sichuan province, each with an annual capacity of 20GWh. At the Huzhou plant, set to cost CNY5.6bn, first-stage production is expected to begin in late 2022. Another factory in Nanjing, Jiangsu province, was announced in June. It will have a capacity of 14.6GWh. The first 6.6GWh stage is set to go into production as early as November.

In May last year, the firm launched a new non-cobalt battery (75% nickel, 25% manganese), which is expected to be used in a luxury car model in Great Wall's Haval series, set to launch in the second half of 2021.

SVOLT is currently making EV batteries at its 18GWh plant in Changzhou, Jiangsu province, which began production in December 2019. SVOLT CEO Yang Xinhong said the company aims to reach a production capacity of 200GWh in 2025. SVOLT concluded a CNY3.5bn (US$544m) financing round in March, which was led by BOCGI (Bank of China Group Investment) and SDIC (State Development & Investment Corporation).

 

Tesla

Tesla’s Shanghai Gigafactory is now producing more cars than its factory in Fremont, California, CEO Elon Musk said this month. While details were not disclosed, Musk said the factory was the best quality, the lowest cost, and “low drama”. Tesla said it would continue to expand R&D investment in China. As of early September, Giga Shanghai has a reported annualised production run rate of 450k.

The plant, which opened in January 2019, took just 168 working days to go from permits to a finished plant. Tesla said this month that it had paid off its US$1.4bn loan from Chinese banks.

 

 

Jiangxi Ganfeng LiEnergy Technology

Chinese power battery manufacturer Jiangxi Ganfeng LiEnergy Technology will build a 10GWh li-ion battery plant and R&D center in Chongqing. The firm, which is majority-owned by Ganfeng Lithium, is also planning a 5GWh battery plant in Jiangxi which is expected to come online in 2023. Ganfeng Lithium supplies battery-grade lithium to automakers like Tesla, BMW and Volkswagen.

 

Geely 

Geely inked an agreement last year with local authorities to spend CNY30bn (US$4.6bn) to build a new 42GWhpa battery factory in Ganzhou, Jiangxi province. Geely has been pushing further into EVs this year, forging major collaboration pacts with Baidu Inc., Foxconn Technology Group and Tencent Holdings Ltd. Geely, which owns Volvo Cars, also has a 9.7% stake in Daimler AG.

 

SK Innovation

To capture growing demand, South Korea's SK Innovation said in September that it would establish a second battery plant in Yancheng.

SK currently operates two joint venture battery plants with China's EVE Energy Co. The firms operate the 10GWhpa factory in Huizhou, Guangdong Province, capable of producing 100k EV batteries, as well as another 10GWh plant in Yancheng, with both coming online this year. SK inked a deal in September to supply Chinese EV maker Xpeng with 80% nickel (NCM) li-ion batteries from Huizhou.

SK also operates a joint-venture plant in Changzhou with Beijing Automotive Industry Corp. The 7GWh plant commenced operations in 2019. SK said last month than it plans to invest KRW1.2tn to build another battery plant in China, which would be the company's fourth in the country.

 

 

EVE Energy

EVE Energy plans to build a 30GWh battery plant in Jingmen, Hubei. Of the total capacity, 15GWh will be for LFP batteries to power logistics vehicles and energy storage, while the other 15GWh will be for ternary batteries for EVs. EVE installed 1.18GWh of battery capacity in 2020 and 1.7GWh during the first nine months of 2021.

 

Tianneng Group

In August, Tianneng Group announced plans to invest CNY3.97bn (US$618m) in a 10GWh-capacity li-ion battery project in Huzhou, Zhejiang province. The first phase, a 3GWh LFP battery plant, has an expected construction timeline of 12 months. The second 7GWh phase has an estimated construction period of 30 months.

Tianneng in 2019 inked a joint venture with battery producer Saft, a subsidiary of French energy major TotalEnergies, to expand li-ion activity. Manufacturing will be based at the Changxing gigafactory, with a potential capacity of 5.5GWh. Saft has a 40% stake in the JV.

Shanghai-listed Tianneng is a large-scale industrial battery company, with 16 production bases in seven provinces of Zhejiang, Jiangsu, Anhui, Henan, Guizhou, Shandong and Jiangxi, and has more than 100 subsidiaries. Last year, its revenue rose 32% to CNY53.5bn, and profit rose 47% to CNY2.5bn.

 

Chaowei Power Holdings

Hong-Kong listed Chaowei Power Holdings manufacturers lead-acid and li-ion batteries for the electric bike and special-purpose EV sectors. The company has battery plants in Shandong, Anhui, Jiangsu, Zhejiang, Jiangxi, Henan and Hebei provinces. Last year, revenue from lead-acid batteries accounted for 89% of its total revenue of CNY27.3bn (US$4.2bn). Full-year profit rose 28% to CNY724m. Tianneng Power holds a 10% stake in the company.

 

Envision AESC

Envision AESC is constructing a 20GWh plant in three phases in Wuxi, which will be capable of providing batteries for 400k vehicles.