Chinese Battery Boom Underway, May Hold 2/3rds Of Market By 2021

3 weeks ago by Mark Kane 17

Chinese Battery Boom Underway (source: Bloomberg)

Bloomberg reports that tons of new project in China could bury Elon Musk in batteries” (which seems a bit sensationalist in the titling) as even the Tesla Gigafactory will not be able to outperform the Chinese market share expansion; which makes sense considering the country is projecting to build over 1 million plug-ins in 2017, and over 7 million by 2025.

The Tesla Gigafactory

Currently, China holds more than 55% of the total lithium-ion production (103 GWh), while the U.S. only 10%.

Because manufacturers in China are on track to add 120 GWh of annual capacity by 2021 (enough for 1.5 million Tesla Model S sedans, or 13.7 million Toyota Prius Primes), China could increase its market share to 65% out of 273 GWh worldwide.

The attention grabbing narrative from Bloomberg continues:

“As Elon Musk races to finish building the world’s biggest battery factory in the Nevada desert, China is poised to leave him in the dust.”

Tesla is currently adding some major battery capacity of its own, a must when one looks to increase production from 84,000 cars in 2016 to a run-rate of half a million by the end of 2018.

““This is about industrial policy. The Chinese government sees lithium-ion batteries as a hugely important industry in the 2020s and beyond,” Bloomberg New Energy Finance analyst Colin McKerracher said.”

““The Gigafactory announced three years ago sparked a global battery arms race,” said Simon Moores, a managing director at Benchmark Mineral Intelligence. “China is making a big push.””

“But don’t count Tesla out. The company, based in Palo Alto, California, plans to announce locations for up to four new factories by the end of 2017. (It’s exploring at least one site in Shanghai.) And there are few, if any, individual Chinese battery companies that can match the scale of Tesla’s production toe to toe.”

source: Bloomberg

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17 responses to "Chinese Battery Boom Underway, May Hold 2/3rds Of Market By 2021"

  1. ffbj says:

    A lot of that production will be consumed by the Chinese economy, as they convert to evs.
    Also modern technological authoritarian states can poor money into their efforts to gain market share.

    1. john doe says:

      Yeah, just see what they did in the solar industry.
      They dominate the industry, and the price fell like a stone. Spot prices was under cost prices several times.

      1. Windbourne says:

        China dominates solar due to dumping on Western nations. Hopefully, Western nations will block China from doing that with battery powered items.

        1. Dan says:

          China installs more solar than the entire west put together. They export only a tiny fraction of what they make.

  2. Anders says:

    True disruption in BEV’s will come from China, if the government continues to favour it.

  3. L'amata says:

    Why is the writer trying to make this Chinese expansion a personal fight against Musk? Musk welcomes competition to speed up the EV transition . Competition works out good for the consumer as well…..I see no problem here.

    1. john doe says:

      To add drama?

      I think it is good for Tesla, as long as they are competetive.
      Not only on price, but maybe more important on quality.
      Good quality at a fairly high price is OK.

      When EV sales reach a certain number and price, the ball will start to roll.
      Tesla will get a percentage of those customers.

  4. Another Euro point of view says:

    Of course. What did you expect ?

  5. Kdawg says:

    Probably shouldn’t put “battery boom” in a headline. 😀

    1. john doe says:

      Just like the Surefire brand of 18650 batteries I bought from China a few weeks ago.
      They works great though.

  6. doctoxics says:

    Your graph does not reflect the 35 gw projected for Gigafactory 1 in 2018 or the 105 gw projected for 2020. This is not a competition because the explosion in electric car production will be limited by lithium ion battery production for years to come. Shouldn’t the ordinate units be gw and not gwh?

    1. Pushmi-Pullyu says:

      No, the proper unit of measure for large-scale battery production is GWh, not GW. GW is a measure of power, while GWh measures energy. The industry measures battery production in terms of storage capacity, which is expressed as gigawatt-hours, or GWh.

      For example, the near-term goal of Gigafactory 1 is an annual production of 35 GWh of battery cells; not 35 GW as you wrote.

      1. Rob h says:

        Confusion is understandable of course (and it’s often mixed up by journalists) as it’s units of storage while GW are used when discussing power generation.

  7. Mark.ca says:

    Elon’s battery factory only salvation (long term) is Trump border tax. If such legislation is to go into effect than he may make it work but battery prices will descend slower. If no BAT then the Chinese will kiil off all the competition just like they did with solar.

    1. Rob Stark says:

      The Chinese didn’t kill non-Chinese solar and won’t kill non-Chinese battery production.

      Tesla is gearing up solar panel/shingle factory in Buffalo NY as I write this.

      The Chinese can only temporarily reduce competition by killing off weaker manufactures by dumping product below cost.

      As soon as they reduce those subsidies and try to make money the competition springs back.

      Giving away Chinese solar panels to Europe,USA and RoW is a great deed of the Chinese government.

      1. Asak says:

        Actually China can kill off most if not all competition because they have no environmental regulations–there may be some on the books, but they’re not enforced. So, they can manufacture stuff dirt cheap because they just pour all the toxins into the local river. Companies in other companies simply cannot compete.

        Of course, in the end China ends up a wasteland, and all the wealthy Chinese want to move anywhere else in the world. They’ve been pretty successful at trashing their own backyard so far. No reason to think it’s going to stop any time soon.

        1. arne-nl says:

          “because they have no environmental regulations”

          They won’t be alone much longer.

          The US is in a race to the bottom. Pruitt is dismantling the EPA in record pace and has a swamp of polluters on hand to write legislation.

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