Insight
Lithium industry urged to fix shortcomings
Last Updated: 2016-08-15 15:44 | CE.cn
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By Yuan Yong

Along with the rapid development of China's new energy vehicles, the market demand of power battery soared in recent two years and saw a "golden period". However, at the same time of boom, there appeared some new problems as well.

Developing into golden era

In 2015, China's output of new energy vehicle reached 37.9 million units and the overall shipments of power battery reached 15.7 million kWh, increased by more than 3 times. The explosive growth of power battery demand has extended to the related material industries including cathode, anode, diaphragm and electrolyte, and extended to the resources industry of lithium ores at the upper reaches. The market supply-demand effect has also begun to show. The price of lithium carbonate, as an important raw material for lithium ion batteries, has risen from RMB 43,000 yuan per ton in 2015 to RMB 160,000 yuan per ton in May this year.

The explosive demand occurred on power battery has made the market supply tight. There is even the situation of new energy vehicle manufacturers waiting in line for the battery at many domestic lithium battery manufacturers. Facing the hot market, some enterprises have increased capacity to meet market demand. Tan Libin, vice president of marketing of Ningde Contemporary Amperex Technology Co., Limited, said that the company's production capacity planned this year was two times than that in last year.

"The investment on power battery is still in the stage of increase currently." Senior engineer Xiao Chengwei of Eighteenth Research Institute of China Electronics Technology Group Corporation said that the kWh number of matching battery was about 16 million kWh with the output value reaching more than RMB 40 billion yuan in 2015, and now the investment of the whole industry has exceeded RMB 100 billion yuan.

According to the strategic objectives of "Made in China 2025", by 2020, the annual sales of China's new energy vehicles will exceed 1 million sets. By 2025, the annual sales of new energy vehicles synchronized with the international advanced level will reach 3 million sets. At the same time, by 2020, the key systems including power battery will reach the international advanced level with the domestic market share reached by 80 percent. By 2025, bulk export will be expected.

At present, there have formed four major industrial areas of domestic lithium industry including Pearl River Delta, Yangtze River Delta, Beijing-Tianjin-Hebei area and the Central Plains area. Qinghai, with the lithium reserves accounted for 80 percent of the country, is trying to create a lithium industry base with the national influence and plans to occupy a market share in lithium relying on the rich lithium resources.

Fixing shortcomings

Behind the rapid growth of lithium industry, some problems gradually appear. In recent years, Chinese government has introduced a variety of forms of policies to promote the rapid start and development of electric car and related industries and achieved some results. But some experts said that the performance of electric car affected by government subsidy did not reflect the real situation of the market. The strong stimulation can easily lead to the phenomenon of blind investment in enterprises and the enterprises' production "pursuing quantity but ignoring quality".

Chen Qingtai, director-general of One-hundred-people Academic of China Electric Vehicle (China EV100), said that under the promotion of favorable policies, many car companies are busy on the output and anxious to get batteries from battery business even lowering the requirements on battery quality. Thus some battery parts companies lower the quality standard, relax management and slow the pace of R&D, to ensure the supply under tremendous pressure of delivery. This phenomenon is very dangerous and worrying.

Thanks to the strong market demand, the China's lithium battery industry has been among the world's first camp currently. But it does not mean that there is no gap between Chinese enterprises and South Korean or Japanese leading enterprises. For example, there is still a wide gap in such aspects like consistency. A responsible person of a lithium battery enterprise told the reporter that at present, the rate of non-performing products of giants in Japan and Korea has been reduced to the level of 3 ppm, namely, there are only three unqualified products in every one million battery cells while the qualified rate of Chinese enterprises' battery cells is still unable to achieve this level.

At the same time, there is also a problem of small and scattered in China's power battery industry. Due to the rapid expansion of the market and the low industry access threshold, a lot of small- and medium-sized companies with low level of R&D have entered into the lithium industry. These enterprises have no advantages at all in technology innovation ability and profit ability.

In addition, for the lithium industry, how to complete the battery recycling process and reduce environmental pollution is also an important factor to ensure the sustainable development of the industry. Some experts predict that by 2020, the number of global waste lithium battery will reach about 25 billion. The uncompleted recycling process will cause great pollution and waste of resources. However the higher recycling cost of waste battery and the lower recycling level of enterprises are a sore point and one of the main gaps of the domestic lithium industry with the lithium industry in developed countries.

Narrowing gaps

Chen Qingtai said, to create a green, healthy and sustainable developed industrial chain of lithium, it is necessary at first to moderately reduce the growth rate of lithium industry, increase the investment in R&D, take great efforts to grasp the quality, solve in a down-to-earth way the problem exposed, accumulate richly and break forth vastly to meet the outbreak of the electric car industry.

How to grasp the direction of R&D and shorten the gap between Chinese enterprises and the top foreign enterprises? Guo Shengcang, president of Technology Institute of China Aviation Lithium Battery (Luoyang) Co., Ltd., said that in addition to the manufacturing and process, the greater gaps between domestic and international top technology is existed in basic industries, "such as on the machining accuracy of the automation equipment for the battery production, there is a gap with foreign top technology and equipment. Therefore, the government and the enterprises should pay more attention to the research of basic industries and narrow the gap between China's technology and the world's top technology."

For the recovery and utilization of power batteries, the minister of Ministry of Science and Technology Wan Gang has said that the recovered power batteries, especially the lithium ion batteries, should not be necessarily scrapped immediately, but can be echelon utilized. Many companies have seen the broad room of echelon use market and try to enter it. However, the lack of standards is seriously restricting the enthusiasm of enterprises entering into the market. Yang Xulai, vice present of Engineering Research Institute of Hefei Guoxuan Hi-tech Power Energy Co., Ltd., said that if problems including battery use cannot be solved, the echelon utilization will be impossible. Therefore, it is very important for the promotion of echelon utilization to strengthen the research on test and evaluation technologies used for quality and performance identification and classification of retired battery and to develop relevant standards.

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