The battery manufacturing industry in China experienced fast growth in the past decade thanks to continuous innovation.
Between January and June 2024, China turned out 32.355 billion batteries with 17.179 billion units exported, according to the Battery Bimonthly, the academic journal of the Hunan Research Institute of Light Industry.
As of this writing, the available China customs statistics showed that export value reached $48.104 billion in the first three quarters of 2024, surging by 220 percent over the same period in 2020. Lithium batteries brought in $43.688 billion, lead-acid types $2.2 billion and primary kinds $1.896 billion.
The top three provinces that contributed much to this performance were Fujian, Guangdong and Jiangsu. They respectively posted $12.06 billion, $11.89 billion and $7.27 billion, accounting for 25.1, 24.7 and 15.3 percent of China’s total export value. Shanghai, Zhejiang, Anhui and others made up for the rest.
The key destinations were the US, Germany, Vietnam, South Korea, the Netherlands, Japan, India, the UK, Australia and Hong Kong SAR, collectively representing $33.26 billion or 69.1 percent of these deliveries.
The US remained the top market, accounting for $10.68 billion or an increase of 3.5 percent over the same period in 2023. Lithium batteries dominated US-bound shipments with $10.11 billion, followed by lead-acid units with $200 million and primary variants with $310 million. These battery types posted respective increases of 7.4, 22.2 and 12.3 percent over values in the first three quarters of 2023.
Lithium category leads
Strong demand in the electric vehicle, energy storage and consumer electronics sectors fueled growth of the Chinese lithium battery market, with the highest rate achieved in recent years.
The Ministry of Industry and Information said that China realized an output of 940GWh lithium batteries in 2023, a 25 percent rise year on year, and a total production value of over $194 billion.
In addition, the country accounted for more than 70 percent of global shipments of lithium batteries in 2023, as reported by the China Central Television (CCTV). Dominating the power battery category with an aggregate share of 63.7 percent in 2023 were six Chinese companies, among the top 10 suppliers in the world. They were CATL, BYD, CALB, Gotion, EVE and Farasis.
The global pursuit of green and low-carbon targets will continue to boost the battery market in the next several years.
In 2025, the Li-ion battery output worldwide is forecast to reach 2,000GWh, with power batteries having 75 percent share, according to Beijing-based S&P Consulting. The same source said that China will have 1,300GWh total including 1,000GWh from power batteries, maintaining its market lead.
Range of batteries
Chinese companies offer various batteries, including lithium, lead-acid, NiMH NiMH , NiCd and dry-cell types, used in consumer electronics, electric tools, medical equipment, electric vehicles, energy storage and military applications.
To capitalize on breakthroughs that have gained a name for China-made batteries, such as CATL’s Shenxing Plus LFP battery and BYD’s Blade EV battery, manufacturers continue to pursue technology innovations.
Many tier-one makers are also expanding their footprint, building facilities outside China. EVE Energy’s first such factory, located in Malaysia, is scheduled to have started mass production in the first quarter of 2025. This entailed a total investment of $422.3 million and will better serve customers in Southeast Asia, Europe and North America. Gotion, meanwhile, has announced two projects, one in Slovakia and the other in Morocco. Each unit costs $1.3 billion and will produce 20GWh lithium batteries annually.
Uncertainties, challenges ahead
There is a projected 3.3 percent growth in 2025 and 2026, according to the IMF’s World Economic Outlook update in January 2025. However, it is below the 3.7 percent average in 2000 to 2019. This could change due to policy changes that could impact the global economy.
In China, exporters have already been dealing with the US’ Inflation Reduction Act (IRA) of 2022 and the Gulf Cooperation Council’s anti-dumping duties investigation on lead-acid batteries for piston engines. The latter was initiated in August 2024.
The fluctuations in the exchange rate of the yuan to the US dollar in 2024 added pressure, forcing companies to balance their quotations for batteries shipped abroad. This weakening is expected to continue in 2025. Bloomberg reported that BNP Paribas SA is forecasting a fall to 7.45 by year-end, Nomura saying a dip to 7.6 in offshore trading by May and JPMorgan Chase predicting the offshore yuan to go down to 7.5 in the second quarter.
And while there was a significant increase in the January to September 2024 export value compared to the same period in 2020, a decline was noted vis a vis 2023 custom statistics. A two-digit drop was experienced every month during the first half of 2024 before picking up again in July. Based on this, the reduction was 9.3 percent compared to the first three quarters of 2023. Overall, for 2024, this might be offset partially or fully. Statista said that China’s overseas shipments reached about $335.6 billion in December 2024, a huge jump from the same month in 2023.
In 2025, it remains to be seen how China’s export value will fare, especially in the face of protectionist trade policies.
Image from iStock
