Development of a strong segment of traction battery makers is key to the sustainable growth of electric vehicles, said Contemporary Amperex Technology Ltd, China's leading traction battery maker.

 

Rechargeable traction batteries are used to power electric vehicles or EVs, including cars. The company said the government must provide subsidies for EV battery makers to boost manufacturing of emission-free green EVs.

 

Founded in 2011, the company makes rechargeable lithium batteries that power electric vehicles and other energy storage systems.

 

Its products are used by world-class automakers such as Bayerische Motoren Werke AG and Volkswagen Group as well as leading domestic bus makers, including Yutong Motor Co Ltd and King Long United Automotive Industry Co Ltd.

 

Huang Shilin, chairman of the company, said: "Rapid development of the electric vehicle market has brought about huge demand for traction batteries."

 

The Central Committee of the Communist Party of China in October approved a document that emphasizes technological innovation in the manufacturing of new-energy vehicles and promotion of electric cars. The twin goals will be drafted into China's 13th Five-Year Plan (2016-20).

 

"This (traction battery) industry can develop very fast as demand has surpassed supply, thanks to the subsidies and tax cuts for electric vehicles," Huang said.

 

Sales of electric vehicles have been rising since 2014. From January to October this year, sales surged 290 percent year-on-year to 171,145 units, according to the China Association of Automobile Manufacturers.

 

A potential risk is the chaotic market where the good and the bad exist side by side.

 

"Any serious security incident could potentially savage the whole industry. We've noticed that some electric buses made by different manufacturers were involved in fire incidents. The market needs to be rationalized, in terms of the number of players," Huang said.

 

Fewer players would be able to focus on manufacturing high-performance traction batteries, he said.

 

Local enterprises still have some distance to cover before they could catch up with world-class standards in traction battery technology. The industrial chain is still not well-developed, he said.

 

"At present, the traction battery is seen as a high-cost new product. Subsidies and other preferential policies exist only for automakers but not EV battery makers, particularly raw material providers. This makes the whole industrial chain uneven," said Huang.

 

China is forecast to surpass the United States to become the world's biggest electric-car market this year, with sales estimated at 220,000 to 250,000 vehicles, the association said.

 

However, Huang Yonghe, chief engineer of the China Automotive Technology & Research Center, cautioned at an industry forum in October that proliferation of electric vehicles could tempt domestic battery makers to expand their capacity recklessly, thereby creating the same problem that is bedeviling traditional carmakers now.

 

Agreed Xu Yanhua, deputy secretary-general of the association. She said China's electric-car industry should focus not just on quantity but quality for sustainable development. In this context, safety and top-quality batteries acquire significance, Xu said.

 

Founded in 2011, the company makes rechargeable lithium batteries that power electric vehicles and other energy storage systems.