Recently, I visited the China International Battery Fair in Shenzhen. This is perhaps the largest battery show in the world, with over 980 exhibitors covering three-quarter of a million square feet. The three-day exhibition was followed by a three-day conference on battery technology and innovation drawing battery scientists from all over the world.

Almost everybody in the battery industry in China attends this show. There were lead acid batteries, NiCad batteries and all kinds of lithium-ion batteries. There were manufacturers of battery electrodes, separators and battery cases. Battery assembly equipment manufacturers were also present.

Most people think of China as a low-tech cheap labor market, but Chinese companies are now making the robots to produce batteries. Back in 2008, Chinese battery assembly equipment manufacturers were struggling to produce cylindrical cells. Today they have mastered the production of cut and stacked cells (which is where the future of lithium-ion technology is heading).

China's central government is investing huge resources into the battery industry to make China the world leader of battery technology.

One hundred years ago the engine was the key to manufacturing an automobile; for electric vehicles the battery is the key: that is where the power comes from. Batteries are the most expensive component in an electric vehicle, sometimes exceeding more than half the bill of materials cost. Tesla's Gigafactory will change the entire automobile industry and give Tesla an incredible competitive advantage, putting Tesla years ahead of all other automobile manufacturers. Tesla will turn its electric vehicle manufacturing volume into a battery cost advantage and make it very difficult for other automobile manufacturers to compete.

The Chinese government also understands the importance of batteries to the electric vehicle industry. The central government is investing huge resources into the battery industry to make China the world leader of battery technology. Close to 900 of the exhibitors at the CIBF were Chinese manufacturers.


China International Battery Fair 2014

The amazing thing about the CBIF is the breadth of the companies exhibiting at the show. Literally everything you need to manufacture batteries was there. The key to cutting battery costs is reducing capital investment and lowering component cost. Low-cost Chinese battery assembly equipment lowers the required capital investment. Chinese component manufacturers further lower costs.

So what happens to lithium-ion battery manufacturing in the US? Well, the US has a much larger market today with the Tesla Model S and the Chevrolet Volt. Volume drives down prices and robotics improve quality and level the playing field with respect to labor costs.

China has fostered an ideal environment to nurture start-up battery companies.

But China is undoubtedly the place to be for the small battery manufacturer. Battery manufacturing today is as much an art form as a science. The start-up company that invents a new recipe to increase power density and reduce cost could become a billion dollar company. With the abundance of battery component and material suppliers, China has fostered an ideal environment to nurture start-up battery companies.

China offers another competitive advantage. On an assembly line not all batteries will meet the manufacturer's specification. Low yields in a manufacturing process can be very costly. Battery manufacturers in China have a strong market to sell batteries which don't measure up to spec: electric bicycles. This market greatly reduces manufacturing risk and can be the difference between profitability and bankruptcy.

China Electric Bikes

Tesla has an advantage that other automobile manufacturers lack because they can justify investment in the Gigafactory to meet their present orders. They can build batteries in huge numbers that will attract component and material suppliers from all over the world. Tesla plans to manufacture a battery which has very high yields so it doesn't need a large market to sell batteries which are out of spec. And they are their own customer so they cut out the middleman while they cut their costs to the bone.

For the rest of the world, low cost batteries will come from China.


Charlie Paglee is the CEO of Brannan Auto, an American automotive component engineering and manufacturing company focused on China, specifically on the electric vehicle industry. Mr. Paglee has more than two decades of business experience in China and speaks fluent Chinese Mandarin. Mr. Paglee is an electrical engineer who started working with electric vehicles in 1991. Mr. Paglee was the Vice President of China for Fisker Automotive and prior to that, he was Employee Number 5 at Aptera Motors.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 192 Comments
      • 5 Months Ago
      What I find missing in the article is the fact that over the past years little has been accomplished in the sense of a dramatic "breakthrough" to storage capacity or charging speeds of batteries......the past 100 years has seen so many improvements in other areas of technology yet for electric storage (batteries) we are still in the dark ages.
        Nick Kordich
        • 5 Months Ago
        Capacity: 1999 - GM EV-1 Gen2: 26:4kWh (NiMH) 2008 - Tesla Roadster: 56kWh (LiCo) 2012 - Tesla Model S: 85kWh (NCA) The three packs are actually fairly close in weight, especially if you don't count that the Model S has part of the body built in (the 85kWh battery only has 4% more cells than the Roadster). The Tesla packs are much more complicated to deliver more power and provide more cooling/safety for the more volatile cells, but this factors that in. Going by cell weights, the EV-1's cells are 44% heavier than the Roadster, even though the pack is only about 7% heavier. The Roadster's overhead is not just for safety for dealing with more volatile cells, but to give higher performance and longer life. It's an apples and oranges comparison - taking off the rind of an orange or including it in the equation are attempts to adjust for different factors, but it depends on what you are trying to quantify about them and the value you assign to other properties of the very different packs. Not dramatic enough? Consider that battery cost also improved, along with capacity and expected lifespan.
        Actionable Mango
        • 5 Months Ago
        Batteries are dramatically better than just 10-20 years ago, much less 100 years ago. Rechargeable lithium batteries are light years ahead of NiCD, NiMH, and Lead Acid. Their energy density has led to a revolution in the capability, size, and weight of portable electronics. All these lightweight and slim smartphones and tablets we have are only possible because of lithium batteries. When I was a kid, a portable game machine used 4 to 8 AA batteries and lasted maybe 3-5 hours. Now you've got a tablet with a brighter, much larger screen; far more demanding processing power; transmitting Wi-Fi, 4G, and bluetooth; all while playing games, browsing the Internet, and even providing a flashlight... and people complain that the battery only lasts to the end of the day! Heck yeah there have been dramatic improvements!
          holophonic
          • 5 Months Ago
          @Actionable Mango
          There are objective metrics to measure battery performance.
      jphyundai
      • 5 Months Ago
      This article is clueless drivel.
      Revis Goodworth
      • 5 Months Ago
      There is nothing special about China and batteries other than the fact that a significant portion of rare earth metals are in control of the Chinese - of course they will develop this since they have no real natural sources of petroleum and their only other significant resource is coal. If you do some research you will see that Chinese has also locked down many rare earth metal supplies outside of china. One has to wonder if China is interested in Afghanistan's significant lithium resource as well.
      kinasi
      • 5 Months Ago
      "Tesla has an advantage that other automobile manufacturers lack because they can justify investment in the Gigafactory" That's hilarious, Tesla is currently $2.2 billion in debt, last month S&P rated their bonds as "JUNK".
        • 5 Months Ago
        @kinasi
        the bloom is off
      Dana Lacoste
      • 5 Months Ago
      Look, I understand the story and where you're coming from. Also, I drive an electric car (a Fiat 500e, not a hybrid!) But I completely disagree with your conclusion. "Batteries are the future, because I've seen Chinese factories produce high quality battery manufacturing systems!" There's a supply and demand issue, but it's not just the creation of the batteries: it's also the required chemicals which go into those batteries, and the upgrades to the electric grid to support mass charging of vehicles. We have so many millions of cars running on gasoline, and so few running on electricity. I don't think Elon's right, because I don't think that batteries (alone) can solve the issue. I think we need something like a hydrogen economy (Hydrogen presents neither greenhouse gas-style emission problems nor requires exotic/rare materials to work with.) (OK, that last part isn't quite right: fuel cells as currently designed _do_ require some exotic/rare materials to work, but that's a different story) The point I'm getting at : batteries are important, yes, but as a "ballast" in the car. The supply to those batteries becomes critical, and Tesla's super charging stations (IMO) do not meet that requirement: they put too much of a burden on the consumer and the electric grid. We _need_ to resolve the electric grid issues (even separate from transportation) and a hydrogen economy makes that vision more attainable than sticking 500lbs of batteries in every car. (I LOVE MY 500E THOUGH! MARCHIONNE NEEDS TO STOP COMPLAINING! :)
        Bernard
        • 5 Months Ago
        @Dana Lacoste
        You can put a diesel generator in every home and still have a net savings in the amount of fossil fuels being burned. The grid isn't going to stop anything, batteries are going to win over ICE the same way online blogs are killing off printed magazines.
        EVSUPERHERO
        • 5 Months Ago
        @Dana Lacoste
        Dana Lacoste, don't you feel bad because you are contributing to Fiat's bankruptcy via your purchase? I really like your car by the way. I was able to look over a orange and white one fully loaded last weekend and I think the 500e is the best looking car of all the EV's with similar city sized packs. It is a shame it is only a compliance car. Congrats on your purchase.
        Spec
        • 5 Months Ago
        @Dana Lacoste
        Dana, you need to educate yourself on some matters. There are no significant electric grid issues with EVs. PNNL already studied this and we could switch some 73% of the light duty cars to EVs without any new power plants as long as they are charged at night . . . which is when people like to charge them. On the other hand, there is ALMOST NO HYDROGEN INFRASTRUCTURE. You've got these two completely backwards . . . it is fuel cells that have the infrastructure problem. EVs require nothing but a $1K EVSE at the customer's home and a few more public chargers scattered around. Hydrogen has to build a massive infrastructure from almost nothing.
          EVSUPERHERO
          • 5 Months Ago
          @Spec
          I have had ED since 2009, EV since 2009, I have a dryer plug still and will never be investing in a home charger unless it is a 1000 dollar HPWC 80 amp draw from Tesla. For level 2, 12- 40 amp home chargers seem a waist of money. Leaf 110v cords can be modified for 300+ dollars and serve as level two on the road charges at RV parks as well as at home. They are modified with1450P plugs which every RV park has. Tesla comes with 1450P as well. Tesla limits the 1450P connection to a 40 amp draw. Their are Clipper Creek chargers in Kirkland WA that allow the Tesla to draw 80 amps through the J1772/Tesla adapter connection same as the Tesla HPWC but of course the adapter is not needed.. I suppose their is slightly more convenience with having a home charging box and cord. I don't know the cost comparison between getting a extra cord with EVSE protocol and the regular EVSE box with cord. Not sure but Tesla's cord is probably 600 dollars, don't know what Nissan's is. I am sure I could use a modified Nissan cord to charge my Tesla using the Tesla J1772 adapter. Sorry about any confusion. I will say in simple terms, if you buy a Leaf, don't spend the money on a EVSE for 1000 dollars, instead have the Nissan cord modified for level 2 charging, Saves 650 dollars and you don't have a big box sitting on the wall. You also have level 2 charging available at RV parks on road trips where Blink, Aerovironment and other level 2 chargers are not present. Just remember to bring your cord when taking road trips. Whew, I should go back and clean some of the above up but some of you will know what I mean.
      DawgByte
      • 5 Months Ago
      Once libtards find out how difficult and costly it is to dispose hundreds of millions of electric car batteries and the damaging impact to our environment (highly toxic substances), they'll wake-up and smell the coffee regarding how ungreen this forced alternative really is!
        davebo357
        • 5 Months Ago
        @DawgByte
        You realize you don't just throw these batteries out right? They get frozen then broken down into nickel, copper, cobalt and lithium carbonate and sold. I guess there's one thing "libtards" are good for and that's being over-educated elitists, huh? It must be nice not knowing anything and not caring enough to read about it and learn.
        Hello, Brian
        • 5 Months Ago
        @DawgByte
        Once certain people learn how to express themselves without insulting sensible people, they might actually be heard. On the other hand, when they express clearly ignorant thoughts that are unsupported by science or reality, people will choose to ignore them, anyway.
        purrpullberra
        • 5 Months Ago
        @DawgByte
        So you like telling lies and spewing garbage like a drunken, slob pre-teen. Please tell me someone has forced you to endure being forced to buy and drive an electric car. Otherwise your stupid use of 'forced' really just shows that you are 'educated' by the retarded, drug-addled mind of Limbaugh and his 'conservative' slug-alikes. "Forced" is like rape, like what Limbaugh fans tend to rely on for release. You've 'forced' others, I feel its safe to assume. But no, neither you nor anyone else has ever been forced to use an EV.
        KaiserWilhelm
        • 5 Months Ago
        @DawgByte
        Once empty headed cave men stop uttering the word "libtard", the world will be a better place.
        SublimeKnight
        • 5 Months Ago
        @DawgByte
        1) Litium ion batteries don't contain toxic substances 2) The copper alone makes them worth recycling
          jphyundai
          • 5 Months Ago
          @SublimeKnight
          Try to spell lithium 10 times. Great research........or not.
        Lancelot
        • 5 Months Ago
        @DawgByte
        Typical Teabagger Trash!
        jphyundai
        • 5 Months Ago
        @DawgByte
        Exactly!!!
        Ziv
        • 5 Months Ago
        @DawgByte
        Dawg, first of all, when the battery is depleted to the point that it isn't giving enough miles to the owner of the electric, the car maker will have it recycled by Toxco and the material will be used to build another battery for a new electric vehicle. The lithium doesn't go away, it gets re-used. In point of fact, if you want a new/replacement battery for the Chevy Volt, you only get the lower price ($2,994) if you return the original battery pack. Same for replacements for the Nissan Leaf pack. Repeating agit-prop doesn't make it correct. But it does point out how sheep-like some people are. They just do and say what they are told.
          pmpjunkie01
          • 5 Months Ago
          @Ziv
          I still don't understand what a "libtard" is and what they are supposed to find out. Is Wang Chuan-Fu, CEO at Chinese automaker BYD a "libtard" because he drank the "highly toxic" electrolyte from his car batteries?
          Greg
          • 5 Months Ago
          @Ziv
          A "libtard" is someone who is as stupid and inflexible as dawg@byte and argues with him.
      rex
      • 5 Months Ago
      Duh, I could have had a V-8! Love the sky ids falling crowd duped by the rich, getting richer white male/female carbon is bad for you crowd. I will take a V-8 with a high lift, long duration cam please. Make that a double. :)
        FordGo
        • 5 Months Ago
        @rex
        A Fox News Win! Poor guy, Republicans screw Republicans, and you lose.
          FordGo
          • 5 Months Ago
          @FordGo
          Here's an example: http://finance.yahoo.com/news/are-tax-cuts-good-or-bad-for-the-economy--161158700.html Republicans too stupid to govern properly. - No road and bridge repair. - Republicans allowing fracking in Republican counties, too ***** to watch "Gas Land 2" and see the pollution, and the health problems. - Tax policy to give Billions to Corporations, and then make the middle class poorer. - Republicans now attempting to Cut Social Security by 66%. You think you're going to grandfather yourself in, and think that will pass? Your Nuts. - And Global Warming NO ACTION. - Obama care HUGE Success even in the South. Thanks Obama! America Fails With Any Republican in Office.
          UnhappyCracker
          • 5 Months Ago
          @FordGo
          Typical pathetic partisan horse-squeeze. Will take whatever filth his party feeds him and call it steak.
        davebo357
        • 5 Months Ago
        @rex
        Because no white people are getting rich at oil companies, right?
      mylexicon
      • 5 Months Ago
      EV people are happy as long as their electricity is not made from H2. Interesting world we live in.
        • 5 Months Ago
        @mylexicon
        Because the H2 is created from natural gas, yet another fossil fuel. What's the point of generating hydro from H2 when you could just take the hydro required to create clean hydrogen and put it in a battery. .....
        Joeviocoe
        • 5 Months Ago
        @mylexicon
        @ mylexicon --"from H2" Well considering that H2 is not found naturally on Earth.... EV people are probably asking where the H2 came from.
          Greg
          • 5 Months Ago
          @Joeviocoe
          For the case of electrolysis, EV people wonder why you would waste most of their electricity just to make something that turns back into electricity less efficiently
      Greg
      • 5 Months Ago
      I believe battery EVs are the future, so I agree with Elon Musk. However, I don't see how this article addresses that. Yes, there is a booming battery industry, and it does appear that this industry will drive down battery costs. But that's only one hurdle, and it's not clear if simple mass production techniques will be sufficient to get the price low enough. We likely still need new battery innovations to really make EVs the future. I believe those innovations will come, but I don't bet they are right around the corner.
      Lancelot
      • 5 Months Ago
      USA = #1 Innovators China = #1 Imitators
      Alfonso T. Alvarez
      • 5 Months Ago
      You are putting far too much emphasis on Tesla's battery factory. Do you really think that ALL of the other battery manfacturers will just roll over and play dead for Tesla? The answer is NO. There are several very large lithium ion battery manufacturing facilities in the US already, including Johnson Controls and A123. A123 went bankrupt, but their battery technology is widely believed to be superior to everyone else by industry experts. Wanxiang, a huge Chinese parts supplier, bought A123 and are investing money again. They have won new business from BMW and GM and are bidding on other business. The Chevy Spark BEV, which has A123 batteries, recently won a comparison test against every other BEV car made in the US in the moderate price range. BMW for sure isn't going with A123 because they have bad technology but cheap - no way. BMW wants the best available for their BEV's.
        Spec
        • 5 Months Ago
        @Alfonso T. Alvarez
        Tesla is the only company with a huge demand for batteries. BTW, GM stopped using the A123 batteries in the Spark EV.
        EVSUPERHERO
        • 5 Months Ago
        @Alfonso T. Alvarez
        Nissan has large demand.
      kinasi
      • 5 Months Ago
      hydrogen benefits: +Energy desnity 8 times higher than batteries +Charnging time of 3 minutes +No range anxiety +More power +Already used in hydrolic lifts and truck throughout the country +Lower cost +Safer Loser...EV
        cobraphx
        • 5 Months Ago
        @kinasi
        8 times higher density is a fantasy. The 2015 Toyota FCV has a 300 mile range with two hydrogen tanks and battery. The Tesla Model S, a larger luxury sedan has a 265 mile range. I don't see anywhere near 8 x improvement in energy density there. Yes, it can refill in 3 minutes if you can find a station. No range anxiety... Really? There are only 9 stations in CA that you can refuel a hydrogen vehicle. Japan, where the FCV will go on sale first only has 17 hydrogen stations in the entire country, most are in the same 4 cities. If you get to the end of the Tslas's range, you can plug into any standard outlet. Where are you going to get hydrogen? More power? Compared to what? The Model S will trounce the Toyota FCV in every measure of power. Who cares that hydrogen is used in Hydraulic Lifts somewhere. There are many more battery powered forklifts out there, so battery must be better. Lower cost? Per mile? Not even close. Toyota says "Hydrogen fuel pricing is in development but we expect the cost of operation to be similar to a gasoline vehicle." So no savings compared to ICE, the 2014 Toyota Camry get's 35mpg combined, at $3.62 a gallon, that $0.10 per mile. The Model S 85kWh on the other hand requires ~93kWh for a full charge, at $0.12 per kWh that's $11.3 to drive 265 miles or $0.043 per mile. Safer? In what way? The Model S has proven to be one of the safest vehicles on the road. Loser ... Hydrogen power. And Hydrogen? It's almost solely made from Natural Gas with the Co2 being released in the atmosphere. Then you expense energy to compress the Hydrogen to a pressure great enough to make storage useful. Consuming more energy to get a useful amount of hydrogen for your vehicle. It would be less damaging to the environment to to just power your vehicle directly from natural gas in the first place.
        UnhappyCracker
        • 5 Months Ago
        @kinasi
        No range anxiety.... You're kidding right!? Currently there are 11 HYDROGEN FILLING STATIONS. Freaking 11. vs every house in America that has electricity. More power? How so? Both FCV and EV use electric drive-trains. Lower cost!? Again how so? Given the conversion energy need to make Hydrogen and the infrastructure that doesn't exist, please explain how you figure the cost are lower for hydrogen vs EV? 95% of current hydro comes from natural gas... Sure, Electrolysis is out there but it's super expensive. Ironically, the carbon dioxide released in the process of producing hydrogen from fossil fuels cancels out any benefits to the environment. Safer!? Hydrogen is highly flammable and unlike gasoline it's odorless.
        • 5 Months Ago
        @kinasi
        I do not know whether to think you are misinformed or an industry shill. Hydrogen is significantly less dense than batteries when you consider the actual electricity that makes it to the electric motor that both drive systems share. Hydrogen will never be more dense than batteries because of the physics involved. The only advantage Hydrogen has is refill time. This stacks against all its disadvantages, which most important of which, hydrogen as it is currently made, and how it will be made for decades, produces as much CO2 pollution as gasoline. This makes it a non-starter in my mind. If we ever have real fusion power, we can revisit hydrogen, when we can realistically make it from water. For the time being, hydrogen is being pushed by the fossil fuel industry specifically because they make hydrogen from fossil fuels, and they can keep their fueling station business model intact.
          wittlief
          • 5 Months Ago
          the 2000 lbs battery in the tesla is good for 250 miles a filled 2000 lb hydrogen tank would be good for about 200,000 miles. Im exaggerating of course, but you got it totally backwards volt_owner, buy MASS, hydrogen has 8 times the energy density of a li ion battery. and when the hydrogen is depleted you don't STILL carry it around with you IN your car!
          Tom C
          • 5 Months Ago
          I think you're assuming way too much. I believe Elon Musk is one of the greatest industrialists in US history (and a monument to smart immigration policies) and can't wait to see what he accomplishes in the decades ahead. On the other hand, hydrogen can be manufactured through simple electrolysis, using electricity to split water up into hydrogen and oxygen. Electrolysis is not very efficient, but it really doesn't matter because solar panels have become exceedingly inexpensive and are continuing to drop rapidly in price. Once installed, solar panel electrolysis efficiency is actually not terribly important because sunlight is free and abundant. Both batteries and hydrogen have a number of very serious upsides and downsides and I don't think anybody can claim to see which (if either) will prevail. Elon Musk betting big on batteries should cause any fair observer to take the battery case seriously, but the same thing can be said about Toyota betting big on hydrogen, and please don't cough up any hairballs about this being only because of government subsidies. Toyota thinks in terms of decades (as does Musk) and wouldn't bet on hydrogen if it didn't believe in it.
    • Load More Comments