Despite the general decline in global automobile sales caused by the epidemic and the shortage of semiconductor chips, electric vehicle sales have grown against the trend.
According to the data from the China Association of Automobile Manufacturers and the European Automobile Manufacturers Association (ACEA), China and Europe, the world’s two largest electric vehicle markets, saw sales surge in the first three quarters of this year.
The booming sales of electric vehicles have driven a surge in demand for lithium batteries. The lithium ion battery separators industry, one of the four primary raw materials, has also ushered in a new round of production expansion.
The highlighted time for Lithium battery
Obviously, the “dual carbon goals” have already become China’s national strategy. China must transform the energy structure and develop low-carbon technologies to implement this goal.
In this situation, lithium batteries are undoubtedly the key to achieving carbon neutrality and the “big heart” of the electric vehicle industry.
Statistics released by the China Association of Automobile Manufacturers show that in the first three quarters of 2021, China’s automobile production and sales reached 18.243 million and 18.623 million, respectively, a year-on-year growth of 7.5% and 8.7%.
Among them, the production and sales of new energy vehicles were 2.166 million and 2.157 million, respectively, a year-on-year increase of 184.5% and 185.3%. In terms of categories, pure electric vehicles held all the trumps.
Of the 2.157 million new energy vehicle sales in the first three quarters, pure-electric passenger vehicles contributed 1.68 million, and pure electric commercial vehicles contributed 108,000.
In other words, pure electric vehicles account for more than 80%. And the annual sales of new energy vehicles exceed 3 million.
Lithium-ion batteries are essential for renewable energy sources and electric vehicles as the core of new energy vehicles.
The Kaiyuan Securities Research Report believes that driven by the booming sales of new energy vehicles in China, the domestic demand for lithium batteries will maintain high growth, reaching 430GWh in 2022.
It is reported that the United States plans a battery alliance with South Korea and other countries. The EU has also invested 6.1 billion euros in building two battery alliances. Under the surging tide, the competition around lithium batteries in various countries is heating up rapidly.
According to incomplete statistics, since 2021, China lithium battery listed companies have intensively issued fixed increase plans, with total planned fundraising of nearly 136 billion RMB to expand production capacity and develop new technologies involving lithium mines, lithium ion battery separators, lithium battery cathodes, anodes, electrolytes, etc.
Production expansion fever of lithium ion battery separators
Lithium batteries mainly comprise positive electrode materials, negative electrode materials, lithium ion battery separators, electrolytes, and battery shells.
Among them, the cost of lithium ion battery separators accounts for about 10%~20% of the cost of lithium-ion batteries. Undoubtedly, the battery separator is the most complex material in the industrial chain to be localized in China.
Driven by profits, China battery separator enterprises want to have a finger in the pie by frequently setting production expansion.
On November, 2021, SEMCORP, a leading company in the field of wet-process lithium battery separators, announced that it plans to invest at least 12.8 billion RMB in production expansion.
SEMCORP plan to build a high-performance lithium-ion microporous battery separator plant in Chongqing SEMCORP, a NEV lithium battery separator plant in Jiangsu SEMCORP Power, an automotive aluminum-plastic film plant in Jiangsu Ruijie Power, and Suzhou Jieli – a battery separator coating plant with an annual production of 200 million square meters lithium ion battery separators.
Once these projects are finished, the company will add a yearly production capacity of 3.4 billion square meters of lithium ion battery separators and an annual production capacity of 280 million square meters of aluminum films.
In addition, on October 2021, Cangzhou Mingzhu announced that its subsidiary company, Wuhu Mingzhu Battery separator Technology Co., Ltd., plans to invest in constructing a wet-process battery separator plant with an annual production of 200 million square meters in Wuhu City, Anhui Province.
At the same time, Putailai also announced an increase in capital for its subsidiary to improve the company’s battery separator coating processing.
Sinoma also stated that its holding subsidiary – Inner Mongolia Zhongli New Materials, plans to build a new plant in Hohhot city, Inner Mongolia. An 895 million RMB capital will be invested in creating a wet-process battery separator production line with a yearly output of 320 million square meters.
In 2021, Senior, one of the top three manufacturers in China, also announced to add an investment of no more than 100 million US dollars to expand the production capacity of its wholly-owned subsidiary Eurostar.
This additional investment will enable the second phase of the European Senior to be equipped with two wet-process separator production lines and two coating lines.
Among the four lithium-ion battery materials, battery separator production has a much higher threshold.
However, in just one month, China lithium-ion battery separator manufacturers have successively planned to invest more than 15 billion RMB in production expansion, reflecting the surge in market demand for downstream lithium batteries.
Be Aware of the overproduction of lithium ion battery separators
Regarding the frequent production expansion in the battery separator industry, industry insiders reminded us that it is still necessary to be alert to overproduction.
According to a Shanghai Nonferrous Metals Network (SMM) survey, the total output of ternary materials in China in October was about 39,000 tons, an increase of 4.7% month-on-month and a year-on-year increase of 54.3%.
In terms of demand, data from the China Automotive Power Battery Innovation Alliance shows that China’s power ternary battery output was 9.2GWh in October, and the need for power battery ternary materials in October was about 18,000 tons.
Therefore, industrial insiders alert that there is an oversupply for ternary materials, which will indirectly restrain the demand for lithium ion battery separators.
On November 18, 2021, the Ministry of Industry and Information Technology released the draft – Lithium-ion Battery Industry Specification Conditions (2021 Edition) on the official website.
The draft is meant to guide lithium-ion battery separator manufacturers to reduce manufacturing projects that only expand production capacity and guide enterprises to strengthen technology innovation, improve product quality, and minimize manufacturing costs.
At the same time, the era of solid batteries is coming. At the beginning of this year, Li Bin, the founder of NIO Automobile, announced that the company would mass-produce solid-state batteries in 2022.
However, it is a “semi-solid-state battery,” to be precise. Even so, industrial insiders predict that the advent of solid-state batteries is only a matter of time and will impact the lithium-ion battery separator market and electrolyte market significantly.
