China’s lithium battery industry detrimental for its economy

economictimes.indiatimes.com:

China’s investment in the Lithium battery industry is seemingly coming back to haunt the country’s smaller battery manufacturers who have invested billions to take advantage of the growing demands as well as the subsidies provided by the government.

China’s battery manufacturers are expected to produce 4,800 gigawatt-hours (GWh) of batteries by 2025 while the demand for such batteries is shrinking by the hour. This is not only quadruple of the demand sought by the country’s EV makers, but is also ultimately going to lead to the closure of battery manufacturers that operate in smaller sizes.

As per reports from private companies operating in the lithium industry, the production capacity at China’s battery factories is estimated to reach more than twice the demand levels in the country, approximately for 22 million EVs.

China, globally accounts for the largest share in processing some of the most essential materials required to produce batteries; such as 65% of the world’s lithium, 74% of cobalt, 100% of graphite and 42% of copper processing units.

The domination in processing of these materials has elevated Beijing as the leader of the battery industry globally and is also critical for it to meet its domestic demand for lithium-ion batteries.

By 2020, nearly 30 expansion projects were announced totalling the investments to approximately USD 20 billion. In the next two years a range of projects were announced tripling the investment amount announced earlier.