(Yicai) Dec. 5 -- China's battery production capacity is expected to reach 8.6 terawatt-hours by 2028, according to a battery analyst at Bloomberg New Energy Finance, the sustainable technology research provider under media outlet Bloomberg.

Shi Jiayan disclosed the prediction at the BNEF Summit Shanghai 2024 yesterday.

Last year, China's battery production capacity exceeded 2 TWh, while the global demand was only 0.9 TWh, she said, adding that China has already the means to supply the entire world.

China's dominant position in the battery market is not expected to change in the near future, given the difficulties Europe and North America are facing in their lithium-ion battery manufacturing localization efforts, Shi explained. In fact, despite they introduced incentives and implemented new measures to support localized production, Chinese battery exports were not greatly affected.

Some 759 gigawatt-hours of planned capacity were recently canceled, postponed, or downscaled in Europe and North America, of which over 600 GWh in Europe alone, according to data released by Shi.

Over the past few years, the value of new energy vehicle batteries imported by the US from China has increased, Shi pointed out.

However, Chinese battery manufacturers are also facing some challenges. According to BNEF, the decline in manufacturing costs has not kept up with the drop in cell prices, meaning that profit margins for battery cells in China continue to fall, prompting Chinese firms to seek opportunities in high-margin overseas markets.

The price of energy storage cells plunged to 30 to 40 Chinese cents (4 to 6 US cents) per watt-hour from 90 Chinese cents to CNY1 (12 to 14 US cents) per Wh at the beginning of last year.

Meanwhile, the average battery price in the global market is expected to drop to USD111 per kWh, or 11 US cents per Wh, by the end of the year and to USD80 per kWh, or 8 US cents per Wh, by 2026, according to a report by Goldman Sachs.

Editor: Futura Costaglione