Chinese regulators encourage lithium-ion battery makers to enhance technological innovation and reduce production costs.

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As China's electric vehicle (EV) industry grows rapidly, power battery suppliers are expanding capacity at a rapid pace. Perhaps in an effort to prevent possible future overcapacity, Chinese regulators are already taking action.

China's Ministry of Industry and Information Technology (MIIT) today released two draft regulatory opinions related to the lithium-ion battery industry for public comment.

The documents mention that the MIIT will guide companies to reduce manufacturing projects solely for the purpose of expanding capacity and encourage them to enhance technological innovation, improve product quality and reduce production costs.

Lithium-ion battery makers and their projects should meet the requirements of national laws and regulations on resource development and utilization, ecological and environmental protection, energy-saving management and safe production, the documents said.

They should also comply with the national industrial policy and related industrial planning and layout requirements, in line with local spatial planning of land and ecological environmental protection special planning requirements.

It is worth noting that the MIIT says these are guiding documents to encourage and guide the technical progress and standardized development of the industry and do not have the pre-requisite and mandatory nature of administrative approval.

Since this year, with the rapid rise in penetration of new energy vehicles in China, a number of power battery companies have released aggressive capacity expansion plans.

On November 17, power battery giant CALB announced that its capacity plans will exceed 500 GWh by 2025, an upward revision from the 300 GWh announced in June. The company expects to achieve 1,000 GWh of capacity by 2030.

CALB has accelerated its industrial expansion since 2021 and has now set up seven industrial bases in Changzhou, Luoyang, Xiamen, Chengdu, Wuhan, Hefei and Heilongjiang, the company said.

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