Work on 2 major battery plants starts in Guizhou

China's Guizhou province saw on Friday the start of the construction of two major battery plants. They are expected to have an annual output of over 18 billion yuan ($2.8 billion), as the province bets big on emerging sectors including new energy for fresh points of growth.

One of the bases, produced by Chinese battery giant Contemporary Amperex Technology Co Ltd, will manufacture power and energy storage batteries. It is set to achieve a total production capacity of 60 GWh a year. CATL said it will also become an advanced production line with an automation rate of 95 percent.

Zhongke Electric Co Ltd from Hunan province invested 2.5 billion yuan in the other plant for lithium battery material production. Once finished, the production value of the new production line is expected to exceed 3.5 billion yuan a year on average.

"The opening of the two major battery plants in the Guian New Area is part of the area's broader push to attract more investment from strategic emerging sectors including new energy, new materials, electronic information and advanced manufacturing equipment for new growth," said Wu Hongchun, head of the industrial development bureau of the Guian New Area.

Guian New Area is a national-level new urban area in Guizhou. In the coming five years, the area will pour more resources into the development of three industrial clusters centering on electronic information manufacturing, big data and software and information technology services.

"Such efforts will drive the industrialization of Guian New Area and could provide a relatively sound foundation for its further industrial and green upgrades in the future," Wu said, adding that more than 30.11 billion yuan of investment has been attracted to the Guian New Area this year.

The move came amid a boom in the country's new energy vehicles despite the challenge brought by the COVID-19 pandemic. China's NEV production and sales in the first 11 months reached 3.02 million and 2.99 million units, up about 167.4 percent and 166.8 percent year-on-year, respectively, said the China Association of Automobile Manufacturers.

"Companies are looking to speed up planning ahead of an expected boom in new energy vehicle sales given the current insufficient production capacity in the industry," said Wang Jing, a research supervisor for high-end manufacturing at Shanghai Chaos Investment Group Co Ltd.

By 2025, China's NEV sales are expected to account for 20 percent of overall new car sales, while purely electric automobiles will account for the majority of new cars sold in the country by 2035. "Their accelerated investment will also provide a strong impetus to the NEV supply chains, so that related companies can also expand their production to ensure raw materials on demand and at relatively low prices," she said.