Upbeat developments in the mobile phone, computer and automotive application markets are encouraging suppliers of lithium batteries in China to raise their investment further in the line. Makers are taking advantage of the “green” trend and the chemistry’s declining prices to boost presence in these sectors.
|Electric vehicles are expected to broaden the market for the "green" chemistry.|
HongKong New Energy invested initially $320 million to build a factory in Ningde, Fujian province. The overall project cost is expected to touch $1 billion. Once operational, the facility will have an annual capacity of 5 billion units or $3.1 billion, positioning Fujian as the world’s largest base for lithium batteries.
Ningxia Yinxing Energy, meanwhile, signed an agreement with a company in Zhuhai, Guangdong province, to establish the first lithium battery enterprise in the Ningxia Hui Autonomous Region. The former is spending $5 million on the undertaking.
The Shandong Dawang Jintai Group has allocated $97.3 million for a similar plant. Shenzhen Zhongtao Battery Co. Ltd has built a facility for aluminum shell Li-ion and Li-polymer battery manufacture, with respective daily output of 120,000 and 50,000 units. For packs, the yield is 80,000 units.
Further buoying makers’ production efforts is the government’s 12th Five-Year Plan, which has identified new-energy vehicles as among the strategic industries to be promoted. This will entail the implementation of a policy in 2016 or 2018 mandating the use of electric vehicles in the country’s major cities to reduce air pollution.
Lithium battery companies see this as a huge opportunity for the sector. They are looking at an estimated 500,000 electric cars in China by 2015. The number translates to 12.5 million kilowatts of Li-ion batteries, or the equivalent of 500 million units for the iPad.
The chemistry, however, has yet to be widely used in EVs due to capacity and cruising range issues. Makers estimate it will take five to eight years for the technology to reach maturity.
Lithium battery manufacture is spread over areas in China that are traditionally strong automotive industry bases. These are Beijing, Shanghai, Hefei in Anhui province, and Guangdong. Enterprises involved in producing materials such as lithium hexafluorophosphate and diaphragms are mainly found in the first two cities and Jiangsu province. The first input is key to Li-ion battery making.
Note: This article "Lithium battery makers boosting production" was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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