As is well known, for a considerable period of time, around 90% of the global lithium battery market was virtually monopolized by foreign companies, particularly those from Japan and South Korea. However, currently, China has taken a dominant position in various core supply chains of the global lithium battery industry. For instance, China’s electric vehicle (EV) battery shipments account for approximately 56.9% of the global total; energy storage battery shipments hold a share of 87% globally; shipments of positive/negative electrode materials make up about 90% of the global market share; electrolyte shipments contribute to over 85% of the global market share, and lithium-ion battery separators occupy over 80% of the global market.
In this passionate era, numerous entrepreneurs in the lithium battery industry have emerged, enduring ups and downs, fueled by an unstoppable gambling spirit and an extreme desire for victory. Some have pursued scientific research like ascetic monks. Eventually, they have staged a remarkable rise of the Chinese lithium battery industry that has captured the world’s attention.
Clausewitz once said in “On War”: “Great generals light up their hearts in the vast darkness, illuminating the way forward with a faint light.”
Now, the lithium battery industry is entering a new round of competition and reshuffling, with some even stating that the “lithium battery industry has entered a era of super capacity surplus.” In the foreseeable future, industry conflicts and competition may further intensify, and a cruel elimination match seems inevitable. In recent months, several industry leaders have publicly called for vigilance against the phenomenon of “super capacity surplus and crazy price wars” in the electric vehicle and energy storage battery sectors, emphasizing the associated risks.
Looking at the rise and fall of the lithium battery industry, whether a company rises to dominance or collapses dramatically, it often comes down to human factors. The influence and decisions of corporate leaders often determine the overall success or failure and may even impact the future direction of the industry. Through data analysis, we can clearly see that even in the fiercely competitive year of 2023, many companies are maintaining double-digit or higher revenue growth, strengthening their overall capital strength, accelerating the construction of international and integrated strategic fortresses, and continuously making technological breakthroughs and advancing industrialization processes. These companies are still growing and expanding their comprehensive strength in the intense competitive environment, undoubtedly reflecting the spirit and power of entrepreneurs.
The development of the lithium battery industry began in the last century, and after the struggle for dominance by European, American, Japanese, and South Korean countries, competition has become increasingly fierce. In this process, China’s lithium battery industry has risen to the top, achieving a qualitative breakthrough in just a decade.
In 2019, Yoshino Akira of Japan’s Asahi Kasei Corporation successfully won the Nobel Prize in Chemistry. Since he began researching lithium batteries in 1981, he has consistently made breakthroughs. In 1983, he invented a rechargeable battery with a polyacetylene anode and a lithium cobalt oxide cathode.
In 1991, Sony introduced the world’s first lithium-ion battery, with a lithium cobalt oxide cathode and a carbon material anode, presenting a cylindrical appearance. This battery was later used in Sony’s own camcorder products and received considerable acclaim.
Japan was at the forefront of lithium battery research, with many well-known Japanese companies actively involved in lithium battery research. Panasonic, for instance, started battery research a century ago, mainly focusing on consumer batteries for digital products. In 1994, the company invented a rechargeable lithium-ion battery and later participated in the research of automotive power batteries. Moreover, with the aggressive efforts of Japanese-owned companies like Toshiba and Sanyo, around the year 2000, Japan dominated the lithium battery industry, with about 90% of lithium batteries originating from Japan. However, the situation took a turn.
Many Japanese companies, despite the favorable situation in the lithium battery industry, unexpectedly shifted their focus from energy research to hydrogen fuel cell research. Particularly, automotive companies such as Toyota seemed convinced that hydrogen fuel cells were the future direct energy source, sparking a wave of hydrogen research in Japan. The Japanese lithium battery industry, which had long lacked any research progress or breakthroughs, was quickly ousted from the international market.
Market demands do not shift massively due to changes in Japan’s research focus. South Korea seized the opportunity to fill the void in this field. Korean enterprises like Samsung, SDI, and LG entered into the production and research of lithium batteries, receiving high attention and support from the Korean government. This catapulted the rapid advancement of the lithium battery industry in South Korea, allowing it to capture a significant market share in a short period.
Around 2010, Japan and South Korea were at the peak of their competition in the lithium battery industry. At that time, Japan held half of the world market, while Korea claimed about 30%.
Meanwhile, China, with its lithium battery production and research just beginning, secured a place in the industry after undergoing several technological revolutions.
China’s Rise in the Lithium Battery Industry
Compared to countries like Japan and South Korea, China’s lithium battery industry started its development relatively late. When Japanese lithium batteries began entering 3C products in 1992, China had just completed construction of its first lithium-ion battery production line in 1997. At that time, many Chinese people were in a state of confusion about what the development of batteries might bring, and the future of lithium batteries was far from their thoughts.
In the Chinese market at the time, enterprises were not optimistic about the future of lithium batteries. However, due to the persistence of scholars like the “Father of China’s Lithium Batteries,” Chen Liquan, lithium batteries were given a chance for development. Continuous technological breakthroughs have since led to the scale and achievements of China’s lithium batteries today. Fortunately, lithium batteries have not only found considerable applications in areas such as mobile phones and computers but have also become crucial in the realm of electric vehicles, marking the next active frontier.
China’s advantage in developing lithium batteries stems from its control of half of the world’s lithium ore resources, with lithium batteries constituting approximately 80% of global production. In Europe, driven by the call for low-carbon emissions, various European countries are eager to replace their internal combustion engine vehicles with electric vehicles to meet carbon emission targets. China strategically entered the European electric vehicle market early, leveraging its massive domestic market and national policy subsidies. Stimulated by changing consumer attitudes, sales of Chinese new energy vehicles have consistently remained high, further boosting the development of the lithium battery industry with a clear competitive advantage.
From development to its current leading position, China’s lithium battery industry has traversed over a decade of challenges and successes. Whether in terms of technology, market share, or supply chain management, China stands at the forefront globally. However, challenges such as battery standardization and overcapacity may need to be addressed for the future stability of China’s lithium battery industry. Standardization is a crucial factor for the industry’s long-term sustainability.