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China Battery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 95 Pages
  • June 2022
  • Region: China
  • Mordor Intelligence
  • ID: 5529994
The Chinese battery market is expected to register a CAGR of greater than 7.5% during the forecast period of 2022 - 2027. The COVID-19 outbreak had not caused any major negative impact on the market studied, but it reduced the average income of families to afford electronic appliances. However, the country witnessed no negative impact on the energy storage systems (ESS) projects in 2020. ESS projects grew by 50% globally, and China was among the top countries to install the highest number of projects in 2020. The major factors driving the market include the rapid adoption of electric vehicles, the growing renewable sector, and increased sales of consumer electronics. On the other hand, the demand-supply mismatch of raw materials is likely to hinder the market growth.

Key Highlights

  • The automotive batteries segment is expected to witness significant growth during the forecast period, owing to the increasing demand for new vehicles produced in the country.
  • Plans to integrate renewable energy with the national grids are expected to create a significant amount of opportunity for lithium-ion battery manufacturers and suppliers in the near future.
  • Declining lithium-ion battery prices are likely to be one of the significant factors driving the battery market in China during the forecast period.

Key Market Trends

The Automotive Batteries Segment is Expected to Witness Significant Demand

The automotive sector is expected to be one of the major end-user segments for lithium-ion batteries soon. The penetration of electric vehicles is anticipated to provide a massive impetus for the lithium-ion battery industry's growth.

Automobile uses a battery as a secondary power unit to power its components or support the engine while cranking. Lead-acid batteries and nickel-metal-hydride batteries are primarily used in conventional automobiles, while lithium-ion batteries are used in electric vehicles.

The electric vehicle (EV) industry has adopted lithium-ion batteries due to the same reasons for which these batteries are used in consumer electronics. The fast growth of the EV industry in recent years has resulted in the automobile sector replacing the consumer electronics sector as the leading consumer of lithium-ion batteries.

China is the largest market for electric vehicles (EV), with over 1.16 million EVs sold in 2020, and it is expected to remain the world’s largest electric car market. China accounted for almost 40% of the global electric car sales in 2020.

Earlier, foreign automakers faced a 25% import tariff, or they were required to build a factory in China with a cap of 50% ownership. In January 2022, the 50% ownership rule was relaxed for passenger cars, added to which the rules restricting a foreign company from establishing more than two joint ventures producing similar vehicles in the country were also removed.​

Furthermore, the government of China is expected to cut subsidies on electric vehicles by 30% in 2022 and completely eliminate it by the end of the year, as the electric vehicle industry in the country is now successful. The planned subsidy cut is aimed at reducing the reliance of manufacturers on government funds for the development of new technologies and vehicles.​ Electric vehicle makers are expected to be the first to benefit from this change, thus increasing the demand in the automotive batteries segment.

Therefore, based on the above-mentioned factors, automotive batteries are expected to witness significant growth during the forecast period.

Declining Lithium-ion Battery Prices May Drive the Market

  • The price of lithium-ion batteries has fallen steeply over the past ten years. In 2020, the lithium-ion battery price was around USD 137 per kWh. Lithium-ion battery prices are falling continuously, and the price decreased by 12.17% in 2020 compared to the price in 2019.
  • An increase in production volume, particularly in China, helped in achieving the economies of scale in lithium-ion battery manufacturing. In addition to these, the large capacity additions also increased the competition among manufacturers, further declining the prices but at the expense of the profitability of the manufacturers.
  • The battery manufacturers in Asia-Pacific, particularly in China, have even lower prices than the global average prices. One of the major causes of lower prices in China is lower labor costs.
  • Hence, lithium-ion batteries are expected to dominate the overall battery market over the next ten years, as they are widely used in cell phones, tablets, and laptops, among other gadgets, whose demand has been increasing at a significant rate globally, especially in countries like China, India, etc.
  • The share of China in lithium-ion battery manufacturing is growing rapidly, with manufacturers like CATL registering the highest revenue and battery production growth among the top lithium-ion battery manufacturers. The increasing share of China in lithium-ion battery manufacturing is expected to support a further decline in the Li-ion battery costs.
  • This sharp and sustained cost reduction is expected to help cement lithium-ion as the battery chemistry of choice in all energy storage markets, including grid-scale, behind-the-meter storage, residential storage, and micro-grids. Additionally, falling battery prices are expected to bring price-competitive electric vehicles to all the major light-duty vehicle segments before 2030, ushering in a period of intense growth for electric vehicles.
  • Hence, the continuous declining cost, leading to the widespread use of lithium-ion batteries, is expected to drive the market growth during the forecast period.

Competitive Landscape

The Chinese battery market is fragmented. Some of the major players include Contemporary Amperex Technology Co. Limited, GS Yuasa International Ltd, TianJin Lishen Battery Joint-Stock Co. Ltd, C&D Technologies Inc., and East Penn Manufacturing Co. Inc., among others.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
4.1 Introduction
4.2 Market Size and Demand Forecast in USD billion, till 2027
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.5.1 Drivers
4.5.2 Restraints
4.6 Supply Chain Analysis
4.7 PESTLE Analysis
5.1 Type
5.1.1 Primary Battery
5.1.2 Secondary Battery
5.2 Technology
5.2.1 Lead-acid Battery
5.2.2 Lithium-ion Battery
5.2.3 Other Technologies
5.3 Application
5.3.1 Automotive
5.3.2 Industrial Batteries
5.3.3 Portable Batteries
5.3.4 Other Applications
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Contemporary Amperex Technology Co. Limited
6.3.2 EnerSys
6.3.3 GS Yuasa International Ltd
6.3.4 TianJin Lishen Battery Joint-Stock Co. Ltd
6.3.5 C&D Technologies Inc.
6.3.6 East Penn Manufacturing Co. Inc.
6.3.7 FIAMM Energy Technology SpA
6.3.8 Tesla Inc.
6.3.9 Saft Groupe SA
6.3.10 Panasonic Corporation
6.3.11 LG Chem Ltd

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Contemporary Amperex Technology Co. Limited
  • EnerSys
  • GS Yuasa International Ltd
  • TianJin Lishen Battery Joint-Stock Co. Ltd
  • C&D Technologies Inc.
  • East Penn Manufacturing Co. Inc.
  • FIAMM Energy Technology SpA
  • Tesla Inc.
  • Saft Groupe SA
  • Panasonic Corporation
  • LG Chem Ltd