China launches major update on battery production regulation
China's industrial regulator plans to launch a major document to guide the production capacity of lithium-ion batteries, which industry experts said will knock out a batch of low-end battery cells and accelerate the structural adjustment of the country's booming lithium-ion battery sector.
The Ministry of Industry and Information Technology unveiled a draft guideline on Wednesday that will guide lithium-ion battery companies to reduce projects that aim solely to expand production capacity.
Instead, lithium-ion battery companies will be encouraged to strengthen technological innovation, improve quality and reduce production costs. They are required to spend at least 3 % of the revenue on R&D and technological upgrades, the draft guideline said.
The China Automotive Power Battery Industry Innovation Alliance predicted that by 2025, the country's lithium-ion battery production capacity will likely exceed 3,000 GWh. However, the capacity utilization rate of the country's lithium-ion battery industry dropped to about 40 % last year and is likely to reach 35 % by 2025.
Mo Ke, founder and president of market consultancy RealLi, said there is some "structural excess" in the lithium-ion battery sector, with insufficient high-quality production capacity but excess low-end production capacity.
"China's latest guideline will drive the lithium-ion battery industry to be healthier and more high-end, which will further help the nation's new-energy vehicles gain a more favourable competitive advantage in the global market," he said.
Cheng Yu
China Daily
Asia News Network
