Chinese Lithium Battery Industry is Developing Rapidly

The Chinese lithium battery industry is catching up at an alarming rate: in less than three years, the country could be home to a giant lithium battery maker that surpasses Tesla's superbattery plant.

According to Bloomberg new energy finance, a think-tank, if the country's leading battery makers can meet their scheduled production targets, China's lithium battery capacity will reach 121 gigawatt-hours(GW) a year by 2020.

Now lithium-ion batteries are like the solar panel industry a decade ago. When Chinese companies poured in and dominated the photovoltaic panel industry chain, the cost of solar panels fell by 70 %.

Goldman Sachs reports that accelerating the transition to electric power in the automotive sector will be a period of rapid development of lithium-ion battery technology for at least the next decade. By 2025, the global market for lithium-ion batteries will reach $40 billion, and Chinese producers could "dominate" the industry.

Behind the rapid rise of China's lithium-ion battery industry is China's rapidly emerging supply chain of new energy vehicles, as well as the government's massive stimulus and support policies.

China is expected to have 5 million electric vehicles on the road by 2020, five times the current number. Government subsidies to the electric vehicle industry have totaled billions of dollars since 2012, making BYD the world's largest maker of electric buses and cars, with a market value of about $18.7 BN.

The Chinese government's new energy policy is also encouraging the lithium battery industry to rapidly become more intensive. New regulations on subsidies for new energy vehicles, released last year, require subsidized car battery makers to produce at least eight gigawatts a day in the future to qualify for subsidies.

After entering the second decade of the 21st century, China's lithium battery industry quickly caught up. In 2013, it replaced South Korea as the world's largest supplier of lithium batteries. China sold more than 500,000 pure electric, plug-in hybrid vehicles in 2016, up 50 per cent from a year earlier.

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