China is likely to become a major production base for electric vehicles in the world soon, as more and more automotive distributor and wholesaler are formulating strategies to develop electric vehicles in the Chinese market. According to a report from BBC Chinese on the 15th, Simon Moore, the general manager of Benchmark Mineral Intelligence (a company that collects price data and assesses the lithium battery industry supply chain), stated that China’s lithium battery industry is becoming the strongest in the world. In a recent interview with Chinese media, he mentioned that super-large lithium battery factories are emerging, with most of the new capacities concentrated in China.
Simon Moore said that although the large-scale lithium battery factories started with Tesla, 70% of the newly built factories by China’s lithium battery manufacturing giants such as BYD, A123 (ATL), and Lishen are located in China.
Lithium battery manufacturing base
He also said that we have seen distributor and wholesaler from Japan and South Korea building super giant factories in China. China’s lithium battery production capacity is expected to account for 62% of the world’s total by 2020.
According to the UK Benchmark Mining Intelligence, the production capacity of lithium battery plants in China is currently 16.4 GWh, and the total production is expected to reach 107.5 GWh by 2020.
The increase in demand for electric vehicles and the government’s strengthening of requirements for energy-saving lamps, along with other factors, have promoted the development of the lithium battery market.
“The global market is undergoing rapid changes, with smaller battery vehicles transitioning to larger electric vehicles.” Morse said, “The increase in electric bicycles in China is also an important factor, and the replacement of gasoline engine cars with electric vehicles will be a key change.”
He also said that when electric vehicles capable of traveling over 230 miles (about 370 kilometers) on a single charge are released at a reasonable price, the electric vehicle market will truly enter a period of significant development. He predicts this could be achievable in three years.
Morris said that investing in lithium batteries and collaborating with major technology companies to build new types of electric vehicles is very important for China, as it will help China maintain a leading position.
China may become the world’s main production base for Chinese electric vehicles and Western brand electric vehicles. In a cooperative scenario, China will firmly seize this opportunity.
Why choose electric cars?
Ford Motor Company has just announced its strategy for developing electric vehicles in China. Ford plans to move 70% of its electric-enabled vehicles to China by 2025.
Reports say that out of Tesla’s $7 billion in sales in 2016, $1 billion was made in China. The company’s president has stated that in a few years, China will account for the largest share of the company’s global sales.
The president of Volkswagen recently said that the design intention of their new I.D. electric vehicle is focused on the Chinese market. The company plans to achieve annual electric vehicle sales of 1 million in China by 2025.
At the same time, Chinese electric vehicle distributor and wholesaler BYD is making an impact in the U.S. market by selling electric buses and electric trucks to customers. BYD is strongly supported by American investor Warren Buffett and Berkshire Hathaway.
Analysts in the automotive industry believe that there are two main factors driving the development of the electric vehicle market in China. One is the expanding proportion of affluent individuals among the Chinese population, who wish to drive luxury electric vehicles like Tesla, as these cars are more durable, powerful, and have a good image.
Another reason is the factor of population distribution. An increasing number of the Chinese population are moving into megacities to enjoy better education and training, with farmers entering megacities for employment. These people need transportation means beyond railways and buses, and small electric vehicles are more suitable for them in crowded cities.
