Rapidly growing demand for electric vehicles (EVs) in China is triggering an explosion of investment in the lithium-ion battery industry, with China's production of power lithium-ion batteries set to jump 400 percent by 2017, according to market research firm CCM.
A total of 78,499 EVs were manufactured in China in 2014, an increase of almost 250% on 2013, and CCM forecasts that this figure will more than triple again in 2015 to reach 250,000.
This growth is sparking a similarly dramatic growth in demand for power lithium-ion batteries. These EV batteries use 10,000 times more electrolyte and much more sophisticated technology than a typical mobile phone battery. Chinese EV brand BYD has already encountered difficulties meeting orders due to a shortage of batteries.
Battery manufacturers are already scrambling to meet this demand. Samsung, LG, and Foxconn all invested more than RMB 2 billion ($325 million) in China's lithium-ion battery market in 2014, and CCM expects to see similar levels of investment in 2015.
Most domestic Chinese battery manufacturers currently lag behind their competitors in Japan, South Korea, and the US in terms of their ability to manufacture high performing EV batteries, though this gap is narrowing gradually, so there is a huge opportunity for international players to gain market share in China's power lithium-ion battery market in the coming years.
Overall, China's power lithium-ion battery market is expected to grow fivefold by 2017, from 4 billion Ah a year to 20 billion Ah a year, to meet growing demand from the EV market.