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China and the global Li-ion battery marketRise of the alternative energy vehicle market and Chinas L-ion battery marketLi-ion battery materials industry
A three-horse race between China, Japan and South Korea
In 2013, China, Japan and South Korea accounted for about 93% of total global output of Li-ion batteries.
From 20032013, global Li-ion battery industry revenues increased from USD5.31 billion to USD27.55 billion, with a CAGR of 17.89%.
Proportion of globalLi-ion battery industry output by country, 2013Source: CCM
Global demand for Li-ion batteries will increase from 67.07 million kWh in 2014 to 131.20 million kWh in 2016, with a CAGR of 39.85%.By 2016, global revenues of Li-ion battery industry will exceed USD35 billion.
Japans market share is decreasing; South Korea has surpassed Japan to become the largest Li-ion battery manufacturer in the world;China is quickening the development of its Li-ion battery industry, claiming an ever greater market share, and is expected to close the gap with Japan over the next few years.
The growth rate of Chinas Li-ion battery industry is 1013 percentage points higher than the global average of 25%.Li-ion battery production capacity is increasingly relocating to China.Chinese brands are grabbing a bigger and bigger share of the global market.
Market share of global Li-ion battery industry by brand, 2013
Promising alternative energy vehicle industry
Each alternative energy vehicle requires 50 kg of cathode materials, 50 kg of electrolyte and 40 kg of anode materials
Global revenues of Li-ion battery industry, 20102020ESource: CCM
Output of alternative energy vehicle industry in China, Jan.Sept. 2014Source: China Association of Automobile Manufacturers & CCM
The quick development of Chinas alternative energy vehicle industry cannot go forward without government support.
Favorable policies of Chinas alternative energy vehicle industryTimePolicyRemarksJul-14The Proposal on Purchasing Alternative Energy Automobiles for Governments and Public Institutions/The Guidance concerning Accelerating Expansion and Application of Alternative Energy AutomobilesThree aspects have aroused attention in the industry: Not draw back the outside alternative energy automobiles' entering into the local markets; list charging infrastructure in urban planning and give related governmental supports; ease the access to vehicle production and encourage the inflow of social capital.Aug-14The Announcement on Tax Exemption for Purchasing Alternative Energy AutomobilesGo into effect from 1 Sept., 2014The First Catalog of Alternative Energy Vehicle Types Free from Vehicle Purchase Tax25 vehicle enterprises are included, totaling 113 types of vehiclesSource: National Development and Reform Commission & CCM
TimePolicyRemarksOct-14In order to implement the Guidance issued by the State Council in late July 2014, all local governments introduced corresponding measures to advance the expansion and application of alternative energy automobiles based on their local situationse.g. Fujian Province's the Notice of Eight Measures to Propel Expansion and Application of Alternative Energy AutomobilesThe Second Catalog of Alternative Energy Vehicle Types Free from Vehicle Purchase Tax30 vehicle enterprises are included, totaling 118 types of vehiclesFavorable policies of Chinas alternative energy vehicle industrySource: National Development and Reform Commission & CCM
CCM predicts that during the Thirteenth Five-year Plan (20162020), China will issue more supportive policies. This indicates that China is determined to develop the alternative energy vehicle industry.
Though Chinas Li-ion battery industry is driven by strong demand from downstream markets, CCM believes that the industry still lags behind Japan in many aspects, especially regarding high-end applications such as power Li-ion batteries.
Increasing input in key materials
China boasts cost advantages in manufacture of Li-ion battery materials LandLaborCluster of upstream and downstream industries: abundant mineral resources and raw materials, and large number of manufacturers in both consumer electronics and alternative energy vehicles industries
Proportions of power Li-ion battery by cost in ChinaSource:CCM
CCM:As China invests more in key materials, technological obstacles will be overcome. Based on cost advantages, the prices of related products will decline to become the cheapest on the global market. Electrolyte:LiPF6, core raw material, sees fine industrialization.Cathode & anode materials: Related mineral resources, like lithium, manganese, ferrum, phosphate and graphite are abundant. Separator:The domestication is quickened.
ElectrolyteChina continues its fast increase in market share, thanks to cost advantages.In 2013, global market capacity was about 60,000 tonnes. Of this, the sales volume of Chinese enterprises reached about 31,000 tonnes. China took the first time to occupy over 50% of market shares.
Market shares of global Li-ion battery electrolyte industry, 2013
Main producers of electrolyte in China, 2014CompanyProduction capacity, t/aZhangjiagang Guotai Huarong Chemical New Material Co., Ltd. 10,000 Dongguan Shanshan Battery Material Co., Ltd. 9,000 Shenzhen Capchem Technology Co., Ltd. 8,600 Tianjin Jinniu Power Sources Material Co., Ltd. 8,000 Guangzhou Tinci Materials Technology Co., Ltd. 7,000 Source: CCM
Lithium hexafluorophosphate (LiPF6 )The global production capacity of LiPF6 reaches 12,000 t/a.
China realizes commercial production and breaks Japans monopoly. Now LiPF6 prices are declining due to overcapacity.Some small-scale Japanese factories have stopped production.
Ex-works price of LiPF6 in China, 20092014Source: CCM
As the technology matures,China quickens LiPF6 industrialization.In the light of cost advantages from fluorochemical raw materials, some Chinese LiPF6. enterprises make noticeable profits. China is expected to become the worlds dominant supply base for LiPF6.
Main producers of lithium hexafluorophosphate in China, 2014CompanyProduction capacity, t/aFuture planDo-Fluoride Co., Ltd.2,200/Guangzhou Tinci Materials Technology Co., Ltd.2,000expand the production capacity to 4,000t/aTianjin Jinniu Power Sources Material Co., Ltd.700expand the production capacity to 2,000t/aJiangsu Jiujiujiu Technology Co., Ltd.700expand the production capacity to 2,000t/aSichuan Huangming Lithium Energy New Material Co., Ltd.100expand the production capacity to 3,000t/aSource: CCM
Cathode materialsIn 2013, Chinas total output of cathode materials amounted to 48,000 tonnes.
Regarding power Li-ion battery, ternary materials such as lithium nickel cobalt manganate (NCM) are expected to dominate the field.
Cathode materialsGlobal production capacity is increasingly relocating to China.
In 2013, China produced 49.83% of the total market share of cathode materials.
Main producers of cathode materials in China, 2014CompanyProduction capacity, t/aHunan Ruixiang New Material Co., Ltd. 12,000 Pulead Technology Industry Co., Ltd. 10,000 Beijing Easpring Material Technology Co., Ltd. 10,000 Hunan Shanshan New Material Co., Ltd. 9,000 Tianjin B&M Science and Technology Joint-Stock Co., Ltd. 8,000 Source: CCM
SeparatorsIn 2013, Chinas total output of separators reached 220 million m2.It is expected that China will rely on a high performance to price ratio to further move up the international supply chain.
Market shares of global separator industry, 2013
Main separator producers in China, 2014
CompanyProduction capacity, million m2/aFoshan Jinhui Hi-Tech Optoelectronic Material Co., Ltd. 100 Xinxiang Zhongke Science and Technology Co., Ltd. 100 Shenzhen Senior Technology Material Co., Ltd. 80 Cangzhou Mingzhu Plastic Co., Ltd. 75 Henan Yiteng New Energy Technology Co., Ltd. 60
Stimulated by active downstream markets, more and more Chinese Li-ion battery enterprises will devote themselves to developing key materials. This will facilitate China to distinguish itself by its cost competitiveness.
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