BYD and other battery manufacturers increase their manufacturing at home and overseas.

As China’s EV battery demand rises, major lithium battery suppliers frequently increase their production capacity. Over CNY100 billion (almost $14 billion) is the size of the market, and many suppliers are speeding up their international expansion.

The sales of BYD’s new energy vehicles are expanding quickly, which has raised the need for EV batteries. In September 2022, BYD installed storage batteries and electric cars (EVs) for new energy vehicles totaling 8.61 GWh, an increase of 104.8% annually. BYD installed 57.493 GWh of batteries over the course of the first nine months of 2022, a growth of 145.36% annually.

According to incomplete statistics, BYD has already planned battery manufacturing facilities in Wuhu, Chuzhou, Xi’an, Jinan, Shaoxing, Bishan, Xiangyang, Changchun, Yancheng, Yichun, and other locations starting in 2021. Currently, the current anticipated production capability will be 217GWh in 2022. This ongoing trend of production expansion is prevalent throughout the whole lithium battery supply chain, not just at BYD.

Industry insiders cited three highlights of this wave of investments. The investment scale has significantly risen, to start. According to data from “battery.tw,” the Chinese battery industry made 156 new investments for growth in the third quarter of this year. There are 136 of them, of which 27 have investments worth more than $10 billion and 22 have investments worth between $5 and $10 billion. These 136 investments totaled more than CNY670 billion, which is already greater than half of the investment volume for all of 2021. (1.27 trillion).

The emphasis on lithium mine resources is the second noteworthy feature. The focus of the battery manufacturers’ investments has been shifting to cities with abundant mining resources ever since the raw material price increases in March 2022. At the moment, they are concentrated in states like Jiangxi, Yunnan, Anhui, and Jiangsu.

The third noteworthy aspect is the growing connection with the supply chain of the sector. To meet the rising demand for manufacturing capacity, businesses are actively engaging with the upstream to secure supply chain security and cut costs.

Additionally, a growing number of businesses in the Chinese battery industry chain are actively raising their exportation in an effort to capture the expansive global market.

Jiangsu Azure had its third extra general meeting of 2022 in October. In the meeting, it was announced that CNY2 billion would be spent on the construction of a new 10GWh cylindrical lithium battery production facility in Malaysia. The production would primarily support applications like power storage, electric tools, intelligent transportation, and cleaning electronics, with a total expenditure of US$280 million. This is Azure’s first investment in a foreign manufacturing venture.

Prior to Azure, CATL already had two significant new energy battery manufacturing facilities in Germany and Hungary, and it also had a US$5.968 billion investment in Indonesia announced. According to CATL, the orders it is currently accepting are long-term ones for four years from now, the most of which are probably going to go offshore.

Industry insiders said that certain battery manufacturers have their production planned until 2030, with a total capacity of over 1TWh, judging by the size of the foreign expansions.

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