Chinese EV and battery maker BYD plans to invest 28.5 billion yuan ($4.2 billion) in a series of battery projects in Yichun, Jiangxi Province. The undertaking will result in an annual output of 30 GWh of power batteries, a battery-grade lithium carbonate project with an annual output of 100,000 tons, as well as a development project of lithium mines, the local government’s statement on August 15 showed.
BYD is the third major new energy enterprise to set up projects in Yichun, after CATL and Gotion High-Tech.
Lithium resources in Yichun exist in the form of lepidolite, which is a common lithium mineral. According to the official website of Yichun, last year, the output of enterprises extracting lithium carbonate from lepidolite in the city exceeded 83,000 tons, accounting for 28% of China’s total output. Lithium carbonate are mainly used to produce cathode materials for lithium iron phosphate batteries.
In April and May this year, CATL and Gotion High-Tech won the exploration rights to some lithium-containing ceramic soil in Jiangxi Province, with price tag of 865 million yuan and 460 million yuan respectively. CATL said that the exploration rights to lithium mining obtained in Yichun is equivalent to more than 6.6 million tons of lithium carbonate, and the company expected to put it into production in a short time.
In the past year, the prices of battery raw materials such as lithium has carbonate continued to rise, leading to an increase in the cost of power batteries and a sharp drop in the profits of battery enterprises. In order to ensure the stability of battery supply chain, BYD and other companies have adopted multiple measures.
In March this year, BYD announced that it plans to spend 3 billion yuan to acquire more than 5% equity of Shengxin Lithium Group, the leading lithium miner in China, as a strategic investor. In July, BYD completed its shareholding in Anda Energy, becoming the ninth-largest shareholder of the lithium iron phosphate manufacturer with a shareholding ratio of 2.11%.
BYD also invested heavily in expanding production this year. Before the signing of this cooperation in Yichun, BYD announced five new battery projects this year, with a planned production capacity of 172 GWh.
According to data from SNE Research, a South Korean research institute, BYD loaded 24 GWh batteries on vehicles in the first half of this year, accounting for 12% of the global market, up 5 percentage points year-on-year. The firm also jumped from fourth place to third place in the global power battery market last year.