Hybrids and electrics are generally known as “green” vehicles, because they either burn less fossil fuel compared to non-hybrids, or in the case of battery-powered vehicles, none at all. By far the most popular and widely available electric car batteries are the deep cycle lead acid batteries. Chinese brands accounted for 96% of 711,000 EVs built and sold in China last year. More Chinese cities are set to add restrictions on fossil-fuel vehicles as the country fights air pollution and highway congestion. President Xi Jinping and his transportation ministers are enforcing a quota on Chinese automakers that 10 percent of car sales be EVs and plug-in hybrids by 2019. That number is expected to increase to 25 percent by 2025—which means multiples of millions of EVs.
“Sales volumes for new-energy vehicles exceeded 700,000 last year, and this number is further expected to increase to more than 2 million in 2020, and to more than 5 million in 2025,” said Kevin Li, a China-based senior analyst at Strategy Analytics. Contemporary Amperex Technology Ltd, or CATL, already sells the most batteries to the biggest electric-vehicle makers in the biggest EV market in China.
After the Japanese company Sony commercialized Lithium-ion batteries in 1981, they have enormously revolutionized the market of consumer electronics. Now they are playing a pivotal part in reducing our extreme dependencies on oil. China produced 44.5GWh of electric-vehicle batteries last year, according to Shenzhen Gaogong Industry Research, or GGII. CATL — which stands for Contemporary Amperex Technology Co. Ltd — sold 11.84GWh worth of batteries, giving it a nearly 30% market share.
While market share figures are inconsistent across research firms, this tally puts CATL ahead of onetime Chinese market leader BYD, and on par with Japan’s Panasonic. CATL has a partnership with German automaker BMW, which is one of the ways the Ningde-based company is expanding its sales channels. CATL also said it is working with Chinese electric-car start-up Nio, whose investors include top tech companies Tencent, JD.com and Baidu.
The battery industry’s success is closely tied to the EV industry’s success – a battery currently accounts for up to half an EV’s cost of production. Given the close relationship of the EV industry and battery industry, the government has picked domestic champions that it is promoting to lead the way in China’s domination of the global battery industry. Production of EV batteries in China is largely irrelevant to U.S. EV manufacturers. Batteries are heavy and dangerous and so battery manufacturers seek to locate as close to vehicle manufacturers as possible because long-distance shipping is not practical.