Chinese EV battery maker adds to overcapacity fears with plan for US$1.39 billion plant in Jiangxi

Jiangxi Judian New Energy Technology starts construction on the first phase of a solid-state-battery plant in Ganzhou
By 2025, Chinese battery manufacturers, numbering close to 50, will be able to produce four times the national demand

Electric & new energy vehicles

Daniel Renin Shanghai

Published: 6:00am, 11 Aug 2023

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Jiangxi Judian New Energy Technology has started construction of a plant to produce solid-state lithium batteries that power electric vehicles (EVs), joining a host of suppliers who are threatening to further flood a market that is already facing overcapacity.

The company will invest a total 10 billion yuan (US$1.39 billion) to build production facilities with an annual capacity of 10 gigawatt-hours (GWh) of batteries in Ganzhou, in eastern China’s Jiangxi province, its parent Shenzhen Fuxin Industrial Technology said in a statement.

Construction for the first phase of the project, which will manufacture 2 GWh of solid-state batteries and another 2 GWh battery packs annually, began on Tuesday. The company did not say when the first phase will be operational. The total project covers an area of 400,000 square metres, with more than half under the first phase.

“A 10GWh capacity is not a small battery production project,” said Davis Zhang, a senior executive at Suzhou Hazardtex, a supplier of specialised vehicle batteries. “Solid-state batteries might represent the future of the industry, but overcapacity woes are looming.”

China’s top electric vehicle battery makers are losing market share to their smaller rivals as competition intensifies in the fast-growing sector buoyed by the growing appetite for green cars. Photo: Getty Images

Technically, 1GWh of batteries can be used to supply the needs of at least 13,000 EVs.

Solid-state batteries are seen as a better option to existing products because the electricity generation process is safer, more reliable and more efficient than the liquid or polymer gel electrolytes used in existing lithium-ion or lithium-polymer batteries.

Judian’s plant adds to mounting worries about a battery glut in China, the world’s largest EV market.

Chinese battery manufacturers, numbering close to 50, will be able to produce 4,800GWh of batteries by 2025, four times the national demand, according to a forecast by mainland online investment publication Gelonghui.

They have dominated the global market as well. Six of the world’s top 10 battery producers are from China, according to Seoul-based SNE Research.

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CATL, BYD, CALB, Gotion, Eve Energy and Sunwoda accounted for 62.6 per cent share of the global market from January to May, supplying 148.7GWh of batteries to companies like Tesla and Li Auto, the mainland’s top maker of intelligent electric cars. Every player in the industry is racing to scale up production to reap cost and price advantages.

“Chinese EV battery producers will have to reach out to more international EV builders to digest their capacity,” said Gao Shen, an independent analyst in Shanghai. “Some small players will not survive the cutthroat competition in the coming years.”

Solid-state batteries have yet to be widely used in EVs.

Last month, Nio, one of the mainland’s top EV start-ups, said its solid-state battery, which is claims can provide the world’s longest driving range, would be launched soon. A Nio car fitted with a 150 kilowatt-hour battery pack can go more than 1,000 kilometres on a single charge, it said.

The battery, which was first unveiled in January 2021, will only be rented to Nio owners, president Qin Lihong said at a media briefing in July, citing its high cost. Beijing WeLion New Energy Technology, the producer of the batteries, said they cost 300,000 yuan to produce.