Opportunities in China’s Lithium Battery Material Industry

Traditional non-renewable resource use in China is being restricted and energy saving techniques is being promoted across the globe. The three core technologies for electric vehicles are motor, electric systems and battery operated systems.

Relative to lead-acid batteries, nickel cadmium battery and ni-mh secondary batteries, lithium batteries have a higher energy density with a smaller self-discharge and a longer life cycles. These advantages place the development of lithium ion batteries at the forefront of new energy vehicle development.

The lithium battery industry chain composes lithium mineral resources, lithium raw materials (including anode materials, cathode materials, the diaphragm, and battery electrolyte) and battery manufacturing and encapsulation parts. One of the anode materials accounts for a disproportionately large part of lithium battery cost – almost 30-40%. From the technical content analysis, diaphragm and electrolyte require the highest technological expertise.

From the current lithium battery industry’s gross margin analysis, diaphragm and lithium hexafluorophosphate electrolyte materials have a gross margin of 70%, electrolyte has a gross margin around 40%, and anode materials and cathode materials have a gross margin of 20%.

At present, China’s domestic electric vehicles lithium battery design process is improving and the industry chain is also gradually realizing greater profits. With the support of national policy, there will be greater investment in the lithium battery industry.

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