In the digital age, current electronic products and new energy electric vehicles are inseparable from lithium batteries. The development path of lithium batteries originated in Europe and the United States, grew in Japan and South Korea, and was finally dominated by China.

(1) Brief introduction
More than 10 years ago, the lithium battery market was monopolized by Japanese companies, with a battery pack costing as much as $1,100 per kWh. After the rise of the Chinese company, the price of a battery pack dropped to $137 per kilowatt-hour, an 89 percent drop in ten years.

Ten years ago, Japanese companies such as Sony, Panasonic, and Sanyo Electric had the right to speak in global lithium batteries, by South Korean companies. At that time, none of the Chinese lithium battery companies could be named.

After more than 10 years of development, the global lithium battery industry has undergone a major reshuffle. China's lithium battery output has surpassed Japan and South Korea in one fell swoop, becoming the world's leader.

(2) The development path of lithium batteries

(1) Originated in Europe and America
Lithium batteries appeared relatively late. In the 1970s, in the context of the global oil crisis, the United States vigorously developed new energy and energy storage technologies in order to reduce its excessive dependence on oil imports. It took nearly 5 years to finally develop the world's first lithium battery. However, this lithium battery is unstable and prone to explosion, and as a result, it has not been commercialized.

(2) Growing up in Japan and South Korea
Later, Japan improved the lithium battery. In 1991, Sony pioneered the release of the first commercial lithium-ion battery. Since then, Japan has become better and better in the field of lithium batteries by virtue of its first-mover advantage in technology. With the rise of smartphones and notebook computers, the rapid development of lithium batteries has also been promoted. In 1998, the annual production capacity of lithium batteries in Japan soared to 400 million, accounting for 90% of the global lithium battery market.

Although Japan has made new breakthroughs in lithium battery technology, it has hit a wall in the electric vehicle market. At that time, the market was dominated by fuel vehicles, and electric vehicles were expensive to produce. In addition, issues such as short battery life have kept EV sales in Japan low. Japan plans to put 1 million new energy vehicles into production, but only 2,500 will eventually be sold. In addition, Japan is also considering that if it continues to develop lithium batteries, it will require more lithium resources. However, Japan's lithium resources are very poor, so Japanese automakers have turned to hydrogen energy. Since then, the Japanese lithium battery industry has fallen into recession.

When the opportunity came, South Korea introduced lithium battery technology from Japan. With the financial support of the big consortium and the subsidy of real money from the South Korean government, a double giant of lithium batteries appeared in South Korea.

(3) In the end, it will be dominated by China
China began to study lithium batteries as early as the early 1990s, but the market demand for nickel-metal hydride batteries was greater at that time, and Japan's technological advantages in lithium batteries made it impossible for many excellent lithium battery companies to appear in China. It was not until 2000 that Chinese battery manufacturers gradually realized the importance of lithium batteries, so a large number of enterprises began to transform and develop lithium batteries.

(3) How did the rising China surpass Japan and South Korea?

(1) In terms of raw materials, the positive electrode material is the core and the most expensive part of the lithium battery, accounting for about 40% of the total cost of the battery, and lithium is just the core raw material of the positive electrode material. However, there are not many lithium resources in China. As of 2020, China's lithium resource reserves are about 4.5 million metal tons, accounting for only about 7% of the world's total reserves. About 85% of them come from salt lake brine, which is very difficult to mine, and there are fewer lithium resources in Japan and South Korea. Faced with this situation, whoever can obtain more lithium resources abroad will have more advantages. Fortunately, Chinese lithium battery giants have been actively purchasing foreign lithium mines since 2017. At present, China holds half of the world's lithium ore resources, and lithium battery production accounts for 82% of the world's total output.

With the guarantee of raw materials, the next step is the market.

(2) In terms of market, new energy electric vehicles have developed rapidly in recent years, and China itself has a huge market. Since 2013, China has implemented a new energy subsidy policy, especially after the release of the power battery white paper in 2019, which has supported the development of related industrial chains. According to statistics, in the past 10 years, more than 18 million new energy vehicles have been promoted globally, of which more than 9 million are in China, accounting for more than half of the world. Coupled with the localization of some core technologies of battery materials, this reduces the import cost of raw materials. At the same time, relying on China's low labor costs, it is China's lithium battery products that quickly seize the market share of Japanese and Korean companies.

At present, China accounts for 60% of the world's leading battery market share, South Korea accounts for 30%, and Japan accounts for 10%.

Low carbon is the general trend, and new energy represented by lithium batteries will definitely replace traditional energy represented by petroleum. China has never led the world in the field of lithium batteries as it is today.