China is building battery plants far beyond levels needed to meet domestic demand for electric cars and grid energy storage, underlining vast state subsidies and unchecked bank lending that are expected to underpin the international expansion of Chinese manufacturers.
Production capacity at China’s battery factories is expected to reach 1,500 gigawatt hours this year — enough for 22mn EVs — more than twice demand levels, forecast at 636GWh, according to data from CRU Group, a research firm.
Battery manufacturers are following a pattern exhibited in other industries such as steel, aluminium and solar panels, industry executives warned, where Chinese companies benefit from subsidies to take a huge share of the global market and squeeze out competition internationally.