China currently has more than 140 battery manufacturers and is expected to account for a significant portion of the global battery industry in the future. In the next 20 years, the market value of the global battery industry will reach 240 billion dollars. In the context of the rapid development of electric vehicles and battery industry, the new energy industry will become an important part of the development of the Chinese market in the future.

With the rapid development of electric vehicles, a number of electric vehicle battery manufacturers have emerged, we are familiar with the Japanese Panasonic, South Korea's Samsung and LG Chem, Tesla Superfactory, China's BYD and so on. Wall Street research and securities firm Bernstein automotive analysts predict that in the next 20 years, electric vehicles in the global automobile sales in the proportion will reach 40%. At this stage, the global production and sales of electric vehicles has almost reached 100 million units, which means that although in the case of the global automobile production did not increase, the annual production and sales of electric vehicles market will reach 40 million units.

Assuming that the price of batteries is close to $6,000, the global market capitalization of the battery industry would be $240 billion. Given the advantages of electric vehicles in combating environmental pollution, China will be a leader in both electric vehicles and batteries in the future.

In order to meet future EV market demand, global EV battery production capacity will need to increase significantly, which is why Chinese battery makers are expanding rapidly. Tesla and Panasonic announced in 2014 that they would build a gigafactory with an annual capacity of 35 gigawatt-hours (GWh) at a time when global battery capacity was less than 50 GWh.

While the global battery industry has changed radically over the past three years, China's battery capacity has grown to 125 gigawatt-hours and is expected to double to 250 gigawatt-hours by 2020. Global battery capacity is expected to show a 10-fold increase from 2020 to 2037, equivalent to the construction of 60 additional new super plants.

Battery development shifts to the Chinese market

Battery technology originated in Japan, was further developed in South Korea, and is now growing in the Chinese market. China's battery production in the global share has long exceeded Japan, is expected to 2020, China's share of the global battery market will exceed 70%.

China's electric vehicle (EV) market is currently booming, and Chinese automakers' favor for domestic products is on the rise, which bodes well for China's future leadership in battery production. According to Roland Berger's E-mobility Index Q2 2017, China's domestic lithium-ion batteries have exceeded 90% among Chinese-branded EVs.

With more and more Chinese companies looking to dip their toes into the battery industry, Beijing is now considering whether to introduce a policy to limit the minimum production capacity of Chinese battery makers in order to further increase China's leadership in the global battery sector. Although it has not yet been officially announced, the Chinese government may require Chinese battery companies to have a minimum annual production capacity of 3 to 5 gigawatt-hours. In addition, the Chinese government released a draft in late 2016 requiring battery companies to get at least 8 gigawatt-hours of annual production capacity if they want to receive government subsidies. This also signals that the Chinese government will plan to support companies with an annual capacity of 40 gigawatt-hours or more in the future.