Drive for NEVs powers China's battery sector

Updated 2017-10-13 13:31:53 Global Times

The power battery industry in China has grown rapidly in recent years, with a big boost from government support for new-energy vehicles (NEVs), and fast expansion is likely to continue, experts noted.

Production capacity of power batteries stood at 27.9 gigawatt-hours (GWh) in 2016 with lithium-iron phosphate varieties, the dominant type used in China's electric vehicles, taking up 60 percent of the total, industry website reported in August.

In the first half of this year, shipments of lithium-ion batteries reached 16 GWh and the full-year figure is estimated to be 42.8 GWh, said the industry report.

The domestic lithium-ion battery market has become more concentrated, with the top 10 producers having a combined market share of more than 80 percent during the first half.

Contemporary Amperex Technology (CATL), a leading automotive lithium-ion battery manufacturer based in Ningde, East China's Fujian Province, ranked top in terms of battery supplies with 328,245 kilowatt hours, surpassing Shenzhen-based BYD Co with a market share of 26 percent in the first quarter, domestic news site reported in May.

CATL has forecast that its annual output capacity will reach 50 GWh by the end of 2020 because of its highly automated and intelligent battery manufacturing facilities, according to a note the company sent to the Global Times earlier.

"China has made marked progress in the research and development of power batteries over recent years and gaps with Japan and South Korea are becoming narrower in terms of manufacturing," Wang Jingzhong, deputy director general of the China Battery Industry Association, told the Global Times on Thursday.

Japan and South Korea have cutting-edge strength in both research and manufacturing while the U.S. and Germany have advantages in battery material, battery design and innovative system integration, according to media reports.

"The quality of domestically made batteries has been largely enhanced with energy density - the core technology that relates to the driving mileage of electric cars, which broke through 100 watt hours per kilogram and then increased to the current 120-130," Wang said.

"The energy density is set to be upgraded as new materials are developed, aiming to realize driving capacity of 500 kilometers, and the battery safety standards also need improvement," Wang remarked.

Wu Shuocheng, a Shanghai-based independent analyst in the auto industry, told the Global Times on Thursday that given the rich resources of rare earths the nation has, China's lithium-ion battery material has been proved to have an obvious advantage.

BYD told the Global Times on Thursday that the company will continue to use lithium-ion phosphate batteries in electric buses and passenger vehicles, but will gradually adopt nickel-manganese-cobalt batteries in its dual-model passenger cars.

In terms of the battery management system (BMS), a key component of battery electric vehicles for cell monitoring, state of charge estimation and other functions, China's capacity fall short of foreign countries, experts said.

"Unlike the lithium-ion battery generally used by domestic carmakers, the battery cell that Tesla Motor utilizes is similar to that in a personal computer, and a Tesla vehicle usually needs above 5,000 cells," Wu said, noting that Tesla's BMS is more mature and sophisticated than Chinese ones.

These systems "require high technology that we do not have enough of," Wu said.

In 2016, China produced 517,000 NEVs, with 507,000 sold, up 51.7 percent and 53 percent year-on-year respectively.

That helped the Chinese market for power battery management systems reach a scale of about 5 billion yuan. The market is expected to be worth 14-15 billion yuan in 2020, Business Insider reported in September.

China has begun studying when to ban the production and sale of traditional fuel cars, the Xinhua News Agency reported in September.

Vice Minister of Industry and Information Technology Xin Guobin has said that the domestic vehicle industry faces "turbulent times" over the years to 2025 in making the switch to new-energy models, and he urged the sector to adapt to the challenge and adjust its strategies accordingly.

"China's power battery industry is set to remain No.1 in the global market in terms of shipments thanks to the nation's determination to develop NEVs," Wu said.

The battery is the heart of the electric vehicle industry, and the nation needs a well-established battery recycling system, Xin told a national forum for the battery-powered engine industry on September 27.

"The current recycling market is quite small since most of the batteries in use have lifespans of at least five years," Wang noted.

"Also, battery recycling technology is immature," he added.

BYD said the company has designed an automated disassembly device for automotive batteries, achieving the recycling of its components.

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