China’s leading battery company CATL announced on September 28 that it will build a battery production base in Luoyang, Henan Province with a maximum investment of 14 billion yuan ($1.95 billion).
The Luoyang project will become CATL’s 13th power battery production base, joining 10 other sites across Fujian, Jiangsu and Sichuan provinces, as well as two overseas bases in Germany and Hungary.
This is not the first time CATL has expanded its power battery production this year. On July 21, it announced that it intended to invest in the construction of New Energy Battery Industry Base Project in Jining, Shandong Province, with total investment of no more than 14 billion yuan. On August 12, the company approved plans to build a 100 GWh battery plant in Debrecen, eastern Hungary, with a total investment of 7.34 billion euros.
CATL’s investment is only one part of the expansion of Chinese power battery companies. Many companies have continuously launched expansion plans or projects of late. On September 15 and September 20, Sunwoda disclosed two announcements, including that it will invest in the construction of the Sunwoda Yiwu New Energy Power Battery Production Base Project in Yiwu, Zhejiang Province and that it will jointly invest in the construction of the Sunwoda Dongfeng Yichang Power Battery Production Base Project with Dongfeng Motor Corporation and Dongfeng Hongtai Holdings Group in Yichang, Hubei Province.
In addition, on the evening of September 27, EVE Energy announced that it plans to invest in an Energy Storage and Power Battery Project in Shenyang, Liaoning Province, with a planned production capacity of 40GWh and an estimated total investment of 10 billion yuan.
Since the beginning of this year, the output and installed capacity of power batteries have been increasing. Public data show that from January to August this year, China’s cumulative output of power batteries was 303.8GWh, up 172.3% year-on-year. The cumulative installed capacity was 162.1GWh, representing a year-on-year increase of 112.3%.
According to estimations by South Korean market research company SNE Research, by 2025, battery production and sales shortage will reach 37% and the installed capacity shortage will reach 25%. Supply and demand will remain tight.