China’s Key Manufacturing, World’s Export Hub for Lithium Batteries

by Vianie Li & Cecile de Veyra

Over four decades, Shenzhen has developed at top speed into an economic and financial powerhouse, being the first of the PRC’s Special Economic Zones to open to the global market. It has become the largest electronics production base in China, with a comprehensive industry chain that has attracted domestic and overseas manufacturers. In 2021, this coastal city realized $340 billion, accounting for one-sixth of the country’s total production value for electronics, according to Sina News. Many major Chinese companies are based in Shenzhen, including Huawei, ZTE, BYD and Skyworth.

In batteries, Shenzhen is also one of China’s key production bases. It is home to more than 1,000 battery suppliers, according to the Shenzhen Battery Industry Association, and about half produce lithium batteries and battery packs. Among them are 12 of Guangdong’s top 20 companies, each with a market value of around $1.42 billion, collectively representing over half of the province’s total. They include BYD, BAK, Sunwoda, Topband, Dynanonic and Grepow. In 2020, this electronics hub’s total production value for lithium batteries reached $56.76 billion, with profits amounting to $4.23 billion.

Being a major electronics production center and having one of China’s largest ports makes Shenzhen an important export hub for lithium batteries in the world. In the first three quarters of 2022, the city’s export value reached $5.71 billion, rising by 75.2 percent over the same period in 2021, based on customs statistics. The top three destinations were the EU, the US and Southeast Asia, respectively accounting for 37.2, 19.1 and 9.4 of export shipments. It was particular to note that the volume of products sent to the EU, India, the UK and South Africa doubled or tripled during the period. This growth trend is expected to continue through 2023 and 2024.

Boosting lithium battery production

The boom in the lithium battery market has attracted new investment domestically and from abroad.

Sunwoda allocated $285 million for a dedicated manufacturing facility for lithium batteries in Shiyan in Shenzhen’s Bao’an district in 2021. This project, which sits on a 120,000sqm site, was scheduled to start mass production in early 2023 and will have a total annual production value of $1.38 billion. It will contribute to the company’s turnover, which reached $5.08 billion in the first three quarters of 2022 or a 43 percent increase over the same period in the previous year.

Other Shenzhen-based suppliers likewise experienced sales growth, boding well for a positive market in the coming months. BYD posted $37.17 billion in January to September 2022, which is an increase of 84.37 percent from the same months in 2021.

Most companies have also been raising their output levels. Shenzhen FBTech Electronics Ltd implemented a 20 percent boost in the past 12 months and will maintain this rate in the months ahead, anticipating higher demand.

Shenzhen-made lithium batteries

Li-ion and Li-polymer batteries in cylindrical and prismatic configurations make up the mainstream supply in Shenzhen. Based on chemistry, there are LiFePO₄, ternary and LCO units, with the first type making up over half of output.

These batteries have a rated voltage of 3.7V and are available in variants with a rated capacity ranging from 800 to 3,600mA, and 0 to 45 C charge and -20 to 60 C discharge temperatures. They have an estimated self-discharge rate of 5 to 8 percent and a life span of more than 500 times or cycles.

Water-resistant units can also be sourced, usually with at least an IP65 rating.

Key applications include mobile electronics, wearable devices, electric vehicles, energy storage systems and robotics.

Most suppliers ensure their batteries have safety features such as built-in overcharge, - discharge, -current and -temperature protection, and are compliant with CE, IEC, MSDS, RoHS, UL and UN 38.3 standards.

OEM and ODM projects remain widely accepted, with such products having a sizeable share of shipments.

To keep up with trends in application markets, manufacturers will continue to develop batteries with higher capacity and safety features and a longer life span. They are also waiting for the recently announced breakthrough from the Shenzhen Institute of Advanced Technology, Chinese Academy of Sciences. This will enable mass production of lithium batteries that have 13 to 25 percent greater energy density than conventional units and a wider operating temperature of -70 to 80 C but are priced lower by 10 to 30 percent.

For cathode and anode materials, electrolytes, separators and cases, companies turn to domestic sources. Many leading providers are also based in Shenzhen. They include BTR, Capchem and GEM. Other manufacturers also purchase separators from foreign companies.

Material and components costs have not changed much in the past 12 months, resulting in stable battery prices. This situation is expected to last until the end of 2023.

Here are lithium batteries from Shenzhen-based suppliers vetted by Global Sources.