China EV Battery Demand explodes

Many in the USA and EU fail to see that in China, battery demand from EVs and grid based storage has a 5 to 10 year leap on technology and size of market. This has huge implications on the price of lithium, graphite, nickel, manganese and rare earth elements which are used in motors and magnets.

A report in Gasgoo (Translated here) highlights the EV auto markets surge. With the background of the global auto industry reform and the tightening of carbon emission policies, mainstream auto companies have accelerated the pace of electrification, and the energy storage industry will also enter a large-scale development stage.

South Korea based SNE Research, in their Top 10 list of global power battery companies showed China has 6 battery manufacturers on the list These 6 companies including CATL, BYD, AVIC Lithium, and Guoxuan Hi-Tech, Envision Power and Honeycomb Energy, account for 47% of the global market share.

According to the latest data from the China Automobile Association, in November this year, EV Sales set anew monthly sales record of 450,000 vehicles. That is 17.8% of new car sales. Market penetration rate of passenger vehicles was 19.5% and in China for 2021, total EV sales was 3.023 million with most (2.99 million) passenger cars and predicted to reach 3.3 to 3.5m vehicles in 2021.

Note that China target was 20% of new sales by 2025. And batteries are going nuts.

Battery Demand from EVs exceeds 1 TWh

Various companies have stated crazy expansion plans/

  • “Honeycomb Energy’s goal is to occupy 25% of the global market share. Calculated on the basis of 75% capacity utilization rate, it will challenge the global production capacity target of 600GWh by 2025.” says Yang Hongxin, Chairman and CEO of Honeycombe Energy
  • Funeng Technology also announced its own 100 GWh production capacity plan.
  • CATL by 2025 is expected to exceed 670GWh, and the production capacity planning area involves Fujian Ningde, Sichuan, Qinghai, Guangdong, Jiangxi, Shanghai and other places;
  • BYD’s planned production capacity is expected to exceed 600GWh in 2025, involving Guangdong, Qinghai, Chongqing, Hunan, Xi’an, Guizhou, Jiangsu, Hubei, Zhejiang and other provinces and cities;
  • AVIC Lithium Battery also has a capacity plan of 500GWh in 2025;
  • Yiwei Lithium Energy will build a capacity of 200GWh in 2023
  • Guoxuan Hi-Tech has a capacity plan of 300GWh in 2025
  • Lishen Battery has a capacity plan of 100GWh by 2025

Total, with incomplete statistics from Gasgoo, by 2025, China local lithium battery companies have planned production capacity to exceed 3TWh.

Top 10 Battery Suppliers

From SNR Research as per Mining.com

Lithium Requirements for China Battery Demand

To put these numbers into perspective for lithium carbonate equivalent requirement, 1GWh requires ~900 tons LCE. So by 2025

  • CATL: 670GWh requiring 603,000 tons LCE;
  • BYD: 600GWh requiring 540,000 tons LCE;
  • Guoxuan (Volkswagen recently invested in the company, owns 26% of Guoxuan): 300GWh requiring 270,000 tons LCE

Just these 3 companies to execute to their plan, they would need 1.4million Tonnes of LCO. If the achieved 3TWh is achieved then that is over 2.7MT of LCO.

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