Driven by the surging demand for new energy vehicles and efficient power storage from both global and home markets, China’s lithium battery manufacturers are rushing to expand their factory capacities and seeking ways to secure material supplies of lithium carbonate. All the factories of Yichun Gotion Battery Co, a subsidiary of Hefei, Anhui-province based Gotion High-tech Co, are operating at full capacity, and a new plant in Yichun, Jiangxi province, will add another 15 gigawatt-hours of battery production capacity. “We will start to build the second phase of this plant with a designed production capacity of 30 GWh, after putting the first phase into operation in late May,” General Manager Zhang Wei said. China is expected to see continued growth momentum in NEVs this year with sales likely to exceed 5 million units. China has been the world’s largest NEV market for seven years in a row, with production increasing from 507,000 units in 2016 to 3.52 million last year. The country exported 310,000 units, a year-on-year surge of more than three times.
In the first quarter, the cumulative capacity of power batteries has grown by more than 120% on a yearly basis, said the China Industry Technology Innovation Strategic Alliance For Electric Vehicles. Yang Baofeng, Executive President of Shuangdeng Group Co, a Taizhou, Jiangsu province-based storage battery producer, said China’s accelerated development of new infrastructure-related projects, such as 5G communication base stations and data centers, has also boosted demand for lithium batteries in recent years. The company added a new production line with an annual output of 2 GWh to make lithium iron phosphate batteries in February. They are mainly used in the energy storage sector.
The growing demand of overseas markets, in particular Europe, has become another driving force to expand the production of lithium batteries in China. The country’s export volume of lithium batteries grew by 53.7% year-on-year between January and March of this year. Ensuring timely delivery has become a pivotal focus of competition among manufacturers throughout China. Since the beginning of this year, more than 30 new construction projects have been launched across China. Their quantity, investment amount and planned production capacity are all higher than those set up in the same period last year, according to the China Industry Technology Innovation Strategic Alliance For Electric Vehicles.
A stable supply of lithium carbonate while expanding production has become a huge challenge for all battery manufacturers, said Ding Rijia, Professor specializing in energy economies at the China University of Mining and Technology in Beijing. However, the price of battery-grade lithium carbonate has fallen in China since April this year, but delivery times and costs of transportation of lithium ore imports have further increased, the China Daily reports.