China’s push towards carbon neutrality as well as its growing manufacturing might will allow electric vehicles (EV) to compete equally with standard cars by 2030 and drive the sector to new heights, the head of a leading Chinese EV battery maker said.
“Obviously, battery cost is the main driver,” said Peng Zhou, chief executive of Octillion Power Systems, a lithium-ion battery supplier headquartered in Hefei in Anhui province. “Economies of scale alone, coupled with innovation, will be sufficient to reach the parity line by 2030.”
China, the world’s biggest producer of climate-warming greenhouse gases, aims to bring emissions to a peak before 2030 and to become carbon neutral by 2060.
Tougher emission standards, more competitive EV models and a national commitment to curb greenhouse gas are driving growth, said Zhou, whose firm designs and builds customised battery modules for automakers and counts Total, Softbank and Samsung Venture Investment among its shareholders.
“We are assuming the carbon peak is going to occur and carbon neutrality is going to occur, and that pushes the entire sector,” he said.
The company supplied 10% of the country’s battery EV market in the second half of 2020, and aims to raise production capacity from 1.4 gigawatt-hours last year to more than 22 gigawatt-hours by 2025. It shipped 95,191 units in 2020, up from 24,844 a year earlier.
It is also aiming to diversify geographically and build on existing business in Brazil, India and North America.
Environmental groups have warned the boom in EV ownership will cause a surge in battery waste. Chinese cities have responded to the challenge by setting up recycling schemes.
Zhou said batteries contain scarce resources like nickel and cobalt, and he was not worried about any imminent “pollution nightmare”.
“By sheer economics there is money to be made reclaiming all the stuff,” he said. “I don’t think people are going to throw them away or dump them randomly somewhere because there is value in there.”