The global lithium-ion battery industry has evolved over the past decade into a three-way competition among China, Japan, and South Korea. However, with the growing influence of traditional automotive companies in Europe and the United States entering the power battery market, this long-standing structure may soon face significant changes.
China, once lagging behind due to technological limitations, is now making a strong comeback. The country's vast consumer market and rapid advancements in battery technology have positioned it as a major player. According to SPIR data, the top 10 lithium battery companies accounted for 72% of the global market in 2016, up from 68% in 2015. Chinese firms like CATL (Ningde Times) and BYD are gaining substantial market shares, while Waterma has also climbed into the top 10.
From a commercial standpoint, Chinese manufacturers have made remarkable progress. Their ability to scale production and reduce costs has made them highly competitive on the global stage. Companies such as CATL have seen their valuations soar, while BYD is focusing on expanding its battery business to gain more market share.
Technologically, China is catching up fast. While Japan and South Korea still lead in ternary battery technology, the gap is narrowing. Chinese researchers have been working on ternary materials for years, and many experts believe that China's lithium iron phosphate technology remains highly competitive. As demand for ternary batteries grows, Chinese companies are expected to introduce new products in the near future.
In terms of raw materials, China has gained a significant advantage. In the past, most battery components were imported from Japan and South Korea, but now the situation has reversed. Chinese suppliers offer cost-effective materials, which has given them an edge over their competitors.
South Korea, on the other hand, is facing challenges. Regulatory barriers in China have limited the presence of Korean battery giants like Samsung SDI and LG Chem. These companies failed to meet China’s battery standards, losing access to government subsidies and market opportunities. As a result, several factories in China, including those in Nanjing and Xi'an, have either reduced production or shut down.
Additionally, the "Sade" incident—referring to the controversy around Samsung's battery safety issues—has further hurt the reputation of Korean companies in China. Many Korean automakers and suppliers are struggling to regain trust, leading to declining sales and partnerships.
Meanwhile, Japanese companies are stepping in. Panasonic, for example, is forming a joint venture with a Chinese partner to produce Tesla-style 18650 batteries in Suzhou. This move signals a shift in the competitive landscape, with Japanese firms looking to capture more market share in China.
China's power battery industry continues to grow rapidly, supported by a strong domestic market, low production costs, and a well-established supply chain. Major players like BYD, CATL, and Guoxuan Hi-Tech are driving innovation and expansion. With these advantages, Chinese manufacturers are increasingly dominating the local market, leaving little room for foreign competitors.
As the global power battery market evolves, the three-point world structure may no longer hold. The rise of China, the struggles of South Korea, and the increasing presence of Japan could reshape the industry in the coming years. The future of the power battery sector will be closely watched, as it plays a crucial role in the development of electric vehicles worldwide.
Cixi Xinke Electronic Technology Co., Ltd. , https://www.cxxinke.com