Chinese battery companies need to overcome three major challenges when going global

Why Chinese Battery Companies Are Going Global

Since 2023, the export of power batteries has become a hot topic. For leading Chinese manufacturers, stepping into the global market is not just an option—it’s a necessity. Expanding overseas helps relieve domestic overcapacity, capture larger market share, and navigate growing trade barriers.

But going global isn’t easy. Companies face three major hurdles:

1. Building benchmark factories abroad.
2. Validating localized products that meet regional standards.
3. Achieving long-term profitability for overseas operations.

Global New Energy Vehicle Growth

Between January and September 2023, global sales of new energy vehicles (NEVs) reached 9.4 million units, a 39% increase year-on-year, representing about 16% of global car sales.

China remained the clear leader, selling 5.92 million units—up 36% year-on-year—with a domestic market share of 29.8%. In fact, China accounted for more than 60% of global NEV sales.

Looking ahead, China will remain a core market, but growth momentum is shifting. The U.S. and Europe are emerging as high-potential regions, growing faster than China in relative terms. Meanwhile, Southeast Asia, the Middle East, and even Pacific markets like the U.S. provide new frontiers for expansion.

Challenges of Internationalization

Going global means navigating not just logistics but also cultural, regulatory, and operational differences.

• Cultural differences: Chinese companies tend to be more reserved, while Western business culture emphasizes open communication.
• Regulatory differences: Europe, for example, has slower and more complex approval processes.
• Behavioral differences: China’s business style is flexible and fast-moving, whereas Europe emphasizes strict standardization and step-by-step execution.

For success, Chinese battery firms must:

1. Stay legal and compliant in each market.
2. Respect local business and cultural practices.
3. Build collaborative supply chains.

At the core, effective communication and resilience in the face of uncertainty will define who thrives abroad.

Branding and Long-Term Strategy

Although only a fraction of Chinese companies are currently capable of large-scale globalization, individual efforts contribute to shaping a strong Chinese brand image worldwide.

Future success requires a long-term mindset, with:

• Technology as the driving force
• Products as the foundation
• Quality as the essence
• Compliance as the baseline

The Current Market Cycle

The lithium battery sector was booming in 2021 and 2022, but 2023 brought challenges. Despite overall oversupply, demand for plug-in hybrid and hybrid vehicle batteries remained tight.

Looking ahead:

• Q1 2024 is expected to stay difficult, with continued pressure on the industry.
• By the second quarter of 2024, however, political and economic headwinds may ease as countries turn toward economic recovery, supporting a rebound.

Industry experts see the current large-scale adjustment not as a crisis, but as a natural cooling-off period after years of rapid growth. This reset is essential to prepare for the next expansion phase.

Outlook Beyond 2025

Starting in 2025, new energy consumption will move from being driven primarily by early adopters to becoming mainstream among ordinary consumers. At that point, global demand for NEVs and batteries will accelerate on a much larger scale.

For Chinese power battery companies—whether competing at home or overseas—success will rest on delivering reliable, high-quality products backed by strong manufacturing capabilities.

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