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Analysis of the development trend of the automotive power battery industry in three aspects
Power batteries have become a central focus in both the automotive and energy storage sectors. However, their most critical application lies within the automotive industry. This article explores the development trends of the power battery industry from three key perspectives.
First, the background of power battery development.
Globally, hybrid vehicles have already reached industrial maturity, while plug-in electric vehicles are currently in the promotion phase. Fuel cell vehicles are still in the demonstration stage, but it is expected that plug-in and pure electric vehicles will see rapid growth by 2020, with fuel cell vehicles gaining significant traction by 2030. In China, the new energy vehicle industry has established a relatively complete R&D and manufacturing system, with a wide range of products successfully launched in the market. China now accounts for more than 50% of global new energy vehicle sales. The country has also set clear long-term goals for the industry. According to the "Long-term Development Plan for the Automobile Industry" released in 2017, China aimed to reach 2 million units in new energy vehicle production and sales by 2020, with the target of making up over 20% of total automobile sales by 2025. By 2020, the total number of energy-saving and new energy vehicles is expected to reach 5 million, which seems achievable given the current development trajectory.
In this context, research on key components of new energy vehicles—especially power batteries—has been well-planned. Major developed countries such as Japan, the United States, Germany, and South Korea have all developed detailed R&D strategies for power batteries, covering materials, system integration, standardization, and next-generation battery technologies.
Second, the current status and future trends of power battery technology.
Today, there are higher expectations for batteries, aiming to match or even surpass the performance of traditional fuel vehicles. Key factors like energy density, power density, safety, cycle life, fast charging, temperature range, and cost must all meet high standards. While achieving all these goals is challenging, continuous efforts from researchers and manufacturers are helping to meet many of them.
Lithium-ion batteries remain a major focus, with improvements in materials and system integration driving better performance. Safety remains a top concern, but energy density, power density, and cost control have significantly improved, allowing lithium-ion batteries to replace lead-acid batteries in many applications. Supported by national five-year plans, the technology has advanced rapidly.
The development of power battery technology is closely tied to national strategies. With a focus on pure electric drive, lithium-ion batteries are being optimized for high-quality performance, and material systems are gradually evolving. Solid-state batteries are also receiving attention, with many universities and research institutions making progress in this area.
Government subsidies have accelerated the industrialization of power batteries in China. The subsidy is mainly based on energy density, with lithium iron phosphate batteries reaching 150 Wh/kg qualifying for a 1.2% subsidy. By 2018, this was expected to increase to 160–170 Wh/kg, and by 2019, 180 Wh/kg.
For ternary materials, energy density ranges from 120 to 250 Wh/kg. For fast-charging buses, 120 Wh/kg is sufficient, while passenger cars require around 230 Wh/kg. Increasing energy density, especially driven by subsidies, helps promote overall battery technology and, in turn, vehicle advancement.
Third, the current state and future trends of the power battery industry.
Currently, the power battery industry is concentrated in East Asia. Globally, Japan leads in technology, while China has made significant progress. It is expected that within the next three to five years, China’s battery technology will take the lead worldwide.
China has more than 200 companies producing power batteries, making it the largest producer globally. Industrial investment in power batteries is also growing rapidly. The cost per watt-hour has dropped sharply, with current costs around 3–4 cents per watt-hour. As capacity increases, this cost is expected to decline further. Some companies are investing between 3 billion and 5 billion yuan in the sector.
China has also built the most comprehensive power battery supply chain, primarily located in the Yangtze River Delta, Pearl River Delta, and Central Plains regions. Many companies in Taizhou are actively working on battery industrialization, creating regional advantages.
Finally, the main application areas of power batteries include four key fields. First, A-class cars, which are small electric vehicles. Second, B-class cars, which are plug-in models. Third, commercial vehicles, particularly buses that require fast charging. Fourth, 40V hybrid, micro-hybrid, or mild hybrid vehicles.
Low-speed electric vehicles represent a large market for power batteries, with millions sold annually in China. From a technical perspective, safety remains the top priority, requiring a balance between energy density, power density, cycle life, and cost. Improving production consistency through automation and optimizing battery design can help advance both development and industrialization.
At the industrial level, the government should promote standardized development to enhance the quality of power battery production and ensure coordinated growth across the supply chain. For enterprises, it is important to plan for both subsidized and non-subsidized scenarios, considering future technological and industry directions.