(Yicai Global) June 8 – China's leading new energy vehicle maker, BYD, aims to stay ahead of the game by investing CNY1 billion (USD156 million) in a plant capable of making better quality lithium batteries compared to its traditional products.
BYD will build the plant in China's western lithium salt-rich Qinghai province, the Shenzhen-based firm said in a statement, adding that the company will reduce capital in its CNY6 billion Shenzhen battery to fund the investment.
The investment is part of BYD's efforts to maintain its position as the frontrunner in the world's biggest NEV market, which accounted for just under half of all sales last year. Competition is increasingly intensifying in the Chinese sector, with rival battery makers such as Contemporary Amperex Technology catching up and even surpassing BYD in terms of technical capabilities. The market environment has led the company to rethink the kind of batteries it produces.
The company traditionally makes ternary lithium batteries, which use cheaper lithium nickel cobalt manganese oxide as the cathode. The new facility will produce cells with lithium-iron phosphate-based cathodes, which have higher production costs but are superior in terms of high power charging and low-temperature performance.
The facility will take two years to complete and boast an annual capacity of 12 gigawatts of power cells. BYD aims to sell the batteries both at home and abroad if its own supply requirements are fulfilled.
Editor: William Clegg