Introduction

Worldwide demand for batteries is expected to rise by 8.3% in 2019, with the increasing demand for uninterrupted power supply and both conventional and electric vehicles and a growing dependency on consumer electronics. Asia has positioned itself to be the largest revenue generating region, followed by North America. The global secondary batteries market has an estimated market size of around $136.3 billion in 2017; of this, nearly 79.6% is contributed by Asia.

Secondary batteries find their applications across various industrial verticals like aerospace, defense, telecom, power, and many others. Prominent battery chemistries constituting secondary battery markets are lithium-ion batteries, lead-acid batteries, sodium-based batteries, nickel-cadmium and nickel-metal hydride batteries, zinc-based batteries, and flow-based batteries. Rechargeable lithium-ion batteries will be the fastest growing products. The vanadium redox flow battery is an advanced battery innovation with advantages such as long life cycle, 100% discharging of stored energy, and it is non-flammable.

The Asian battery market presents opportunities for both emerging and mature organizations. Increased demand from automobiles and the consumer electronics sector from developing economies like India, China, Thailand, and Vietnam are boosting this market. China is one of the fastest growing and largest markets. The Chinese battery companies are now beginning to dominate the industry which was for decades controlled by Japan, American, and European manufacturers. The Chinese government is providing subsidies to local secondary battery manufacturers to cater to the increasing demand for secondary batteries. On the other hand, the battery industry is proliferating in Japan, which has ambitious targets to produce half of the world’s batteries by 2020. Korean lithium-ion imports have increased for two consecutive years in 2016 and 2017. Push for photovoltaics and energy storage systems in Korea provides a platform for many players in the secondary battery market. The companies that have been briefly discussed in this article are Lishen, Rongke Power, Cellennium, BYD, and SK Innovation.

The Rise of Asian Companies in the Battery Sector

Around 140 million electric cars are expected to be on the roads by 2030. Rising demand in the electric vehicles market will impact the type of battery material used and be strong drivers of the growth in Asian countries. Asian battery companies have consistently been developing lithium-ion batteries with a higher proportion of nickel for use in electric cars to offset the cobalt price rise. The emerging market for energy storage and distributed generation through renewable energy is another reason behind the growth of the secondary battery market. Multiple Asian nations have favorable renewable energy storage policies that promote domestic consumption. Chinese manufacturers like BYD and CATL are backed by subsidies and aggressive government policies that impose restrictions on several foreign organizations. Factors like cheap labor, access to raw materials, and ease of doing business are a few reasons for the rise of companies in the secondary battery industry across Asia. Japan also has a subsidy program to support up to 66% or two-thirds of the purchase cost for homes and businesses that install lithium-ion batteries.

Key Industry Players in Asia

Lishen: Tianjin Lishen Battery Joint-Stock Co., Ltd., China, is controlled by state-owned companies along with private shareholders. The organization has maintained its prominence in the production of lithium-ion batteries over the years. It caters to the consumer electronics segment, power batteries for electric vehicles, energy storage systems, and new energy transportation. The company’s six main product categories are cylindrical batteries, prismatic batteries, power batteries, polymer batteries, photovoltaics and ultracapacitors. Employment of advanced technologies and sophisticated automation equipment has helped the company to meet its technology and quality objectives. This approach has helped the company obtain various international certifications such as ISO9001, ISO 14001, and UL. The recognition earned due to high product quality has, in turn, earned the company prestigious customers like Apple, Motorola, and Samsung among other top electronics and automotive firms.

Rongke Power: Dalian Rongke Power Co., Ltd. was established in 2008 jointly by Dalian Bolong Holding Group Co., Ltd. and the Dalian Institute of Chemical Physics, Chinese Academy of Sciences. The company is vertically integrated, possessing independent R&D and production capacity of vanadium flow battery industry chain. Rongke Power achieved great technical breakthroughs and claimed proprietary intellectual property rights on key battery components, such as electrolyte, ion exchange membrane, bipolar plate, and high-performance cell stack. Through its undertaken projects, Rongke Power has taken the lead in preparing standards for the international battery industry. The continuous innovation in vanadium flow battery technology has helped the organization achieve a leading position in this segment. By developing containerized portable products in 2013, the cost of the same was significantly reduced, enabling Rongke Power to receive orders of key materials of more than 100MW in Japan and Europe. The product quality was highly regarded by the Bosch Group in 2014. Vanadium flow battery energy storage systems have also been delivered to the wind farms in the north of Germany.

Cellennium: This is the sole licensee in Thailand to commercialize a number of new inventions associated with vanadium fuel cells. These inventions are owned by Squirrel Holdings Limited and are protected by patents or by applications for patents across the globe. Cellennium is developing a set of related technologies that could provide catalysts to the accelerated development of renewable energy. The two main innovations of Cellennium are the sugar fuel cell and the vanadium redox flow battery. Vanadium flow batteries are suitable for energy storage systems, renewable energy, and small-scale electricity generation. Vanadium batteries are completely containerized, non-combustible, and conservative. The battery chemistry allows them to be reused over semi-infinite cycles while discharging 100% of the stored energy. The sugar fuel cell is a vanadium fuel cell system which generates electricity using carbohydrates and has a proven efficiency of 45%.

BYD: The company is principally engaged in the IT industry and is mainly related to the rechargeable battery business, handset and computer components and assembly services, as well as the automobile business, including traditional fuel-powered vehicles and new energy vehicles. Taking advantage of its technical superiority, it is actively developing other new energy products such as rail transit, solar farms, energy storage stations, electric vehicles, LEDs, electric forklifts, etc. BYD has invested heavily in establishing the Central Research Institute, the Electronics Research Institute, the Automotive Engineering Research Institute, and the Electric Power Research Institute. BYD has successfully built a unique technology R&D platform that matches international standards. BYD has become the most innovative independent national auto brand and leads the field of electric vehicles with its unique technologies.

SK Innovation: The company is an energy and chemical company that works with various industries like petroleum production, refining, chemicals, and energy. The company has developed lithium-ion batteries for hybrid electric vehicles and is collaborating with various automobile companies to cater to their battery needs. The company is manufacturing the lithium-ion batteries by changing the proportion of the metals used typically for NMC-based lithium-ion batteries. These changes would help boost battery production while stabilizing costs and also result in extending battery life. SK Innovation will build its first overseas lithium-ion battery plant in Hungary, which will be designed at an annual production capacity of 7.5 GWh, which is twice the capacity of the plant at South Korea (3.9 GWh). This plant will meet the battery needs of European automakers like Mercedes Benz.

SWOT Analysis

Strength

  • Secondary batteries find their applications across varied industry verticals such as energy storage systems, electric vehicles, and uninterrupted power supply. Companies like Lishen and SK Innovation have a diverse range of products to cater to these verticals.
  • Factors like cheap labor and ease of doing business boost the Asian battery market. This enables the companies to strengthen their manufacturing/production base and plan expansions as the demand for secondary battery increases. Lishen is planning to expand its production base by 20GWh by 2020.
  • Multiple nations have policies that favor energy storage systems, like subsidies for consumers adopting the new technologies, thereby increasing the local demand for the products. Japanese policies support residential and business entities which install lithium-ion batteries to lower the purchasing cost. This has widened the market for emerging players like SK Innovation and Lishen, allowing them to establish their consumer base.

Weakness

  • The market penetration of emerging companies is lower than that of the established organizations like Samsung and Panasonic.
  • The brand recognition of companies like Cellennium and Rongke is lower than that of companies like Lishen and BYD, thereby making the competition fierce and market penetration difficult.

Opportunities

  • The cost of battery energy storage applications is very high since this is an emerging market. The companies mentioned above have the opportunity to tap into this market and expand their product portfolio.
  • The demand for electric vehicles is expected to grow by 30 million in 2030; this is a potential market for the companies to tap into.

Threats

  • Lack of economic recycling and re-use schemes pose a threat to the secondary batteries as the demand keeps increasing.
  • The price fluctuation of raw materials is a key factor for the high production costs. Specifically, cobalt prices are expected to surge, which, in turn, could directly impact the production costs of the companies.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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