(Yicai Global) Feb. 8 -- A number of Chinese lithium battery makers invested over CNY100 billion (USD14.7 billion) in capacity expansion projects last month, much more than in the same period a year earlier, Shanghai Securities News reported today.

Eleven projects to expand power and energy storage battery capacity by 311 gigawatt-hours were unveiled in January, data from consultancy Gaogong Industry Research Institute showed. Each project will exceed 10 GWh, with six costing more than CNY10 billion (USD1.5 billion) each.

The expansion of lithium battery production last year was driven by increasing demand, mature technologies, local government support, and better economic returns. China’s shipments of the batteries surged nearly 98 percent to 660.8 GWh in 2022 from the year before, according to figures from industry information website Gaogong Lithium Battery.

Energy storage batteries have become a major area for investment this year, with Eve Energy, Ganfeng Lithium Group, Exen New Energy, and Shenghong Holding Group pouring in cash to expand their output capacity. There were 113 power and energy storage battery projects in China last year with a total investment of nearly CNY900 billion, the report said.

On Feb. 1, Eve Energy put into operation its CNY10.8 billion power and energy storage battery gigafactory in Jingmen, Hubei province. At 60 GWh, it is the world's largest lithium battery plant by capacity.

Higher investment also reflects the supply and demand situation, with shipments of energy storage lithium batteries soaring 171 percent to 130 GWh last year from 2021, according to Gaogong Industry Research Institute. Some of the capacity released by leading battery makers this year had been tied up by downstream clients in the first half of 2022.

Most of the battery makers that have set out capacity expansion plans this year are second and third-tier firms. Almost all of the industry leaders in China raised capacity to the fullest in the past two to three years, with only some making such investments this year.

Second and third-tier producers have also begun to follow a different development path to find the resources needed to increase their capacity, focusing on market orientation, client relations, and product technologies.

Editor: Martin Kadiev