In recent years, China has experienced explosive growth in the new energy vehicle sector, surpassing Japan in the first half of 2023 as the world’s leading automobile exporter. The key driver behind this success lies in China’s dominance in the electric vehicle market, with a particular focus on the core component: lithium batteries. Understanding why the global battery industry remains intertwined with China necessitates an exploration of the factors contributing to its leadership.
The remarkable achievements in China’s new energy vehicle sector can be attributed to the country’s leadership in the production of power batteries, often considered the heart of electric vehicles. Concerns such as limited range, battery degradation, rapid power loss, and safety issues are all closely tied to power batteries.
These batteries not only influence the functionality of vehicles but also significantly impact their prices, accounting for 40% to 60% of the total vehicle cost. When browsing through showrooms of new energy vehicles, consumers are not only provided with information about the vehicle’s range but also details about the battery’s manufacturer—a phenomenon rarely seen in traditional internal combustion engine vehicles.
While European, American, and Japanese automotive powerhouses have conducted research on power batteries for years, the technology has struggled to mature. China, although entering the lithium battery research field later than some international counterparts, established its first laboratory in the late 1970s.
In 1991, when Sony commercialized lithium-ion batteries, Chinese academician Chen Liquan, who had visited Sony’s production facility in Tokyo, played a crucial role in bringing this technology back to China and industrializing lithium-ion batteries.
As the mentor of CATL (Contemporary Amperex Technology Co. Limited) founder Zeng Yuqun, Chen Liquan has contributed significantly to cultivating experts in China’s lithium battery industry. Apart from academic research, companies like BYD, Lishen, and Wanxiang Group have also been exploring lithium-ion battery technologies.
The production of power batteries is an intricate process involving micro and nano-level materials, with a single vehicle requiring thousands of battery cells. According to the “bucket effect,” any weakness in a single cell can limit the entire battery pack’s performance. China has established a comprehensive battery industry chain, with global shipments of positive and negative electrode materials, separators, and electrolytes exceeding 70%.
By delving into companies along the power battery industry chain, including those producing positive electrode materials, separators, structural components, and functional auxiliary materials, one can observe how they have overcome key technological challenges, reduced costs, and evolved into global enterprises.
China’s current leadership in power batteries is a result of early policy guidance and the understanding among industry practitioners that new energy vehicles must match or even surpass the functionality of traditional internal combustion engine vehicles to thrive. Starting from the ability of lithium batteries to provide longer ranges, the industry has consistently focused on addressing the pain points of new energy vehicles.
By examining the core issues during the early development of power batteries and envisioning the potential extent of their development, China initially produced lithium batteries for consumer electronics before venturing into power batteries.
In just a few short years, China’s power battery industry has undergone a leap from seeding and sprouting to growth and prominence. With robust policy support creating a favorable external environment for power battery development, Chinese enterprises have dedicated themselves to researching power battery technology. They have overcome numerous constraints through countless tests, validations, optimizations, standardizations, and improvements, gradually narrowing the gap with foreign power battery giants. This relentless effort has propelled China’s lithium battery industry to rapid prominence, emerging as a global leader in the field.