There has been a reconsolidation of the lead-acid battery industry in the recent month, and low inventory level has been reported in various regions in China. A large number of lead-acid battery manufacturers have requested a stringent response from the government for falling inventory level.
In the beginning of May, Chinese government started to straighten out the pollution caused by manufacturing of lead-acid battery causing massive manufacturers to shot down production in Zhejiang, Jiangsu, and Sichuan areas of which Jiangsu and Zhejiang are two main provinces where lead-acid batteries are produced affecting the whole supply chain.
Since lead-acid batteries account for more than 97% of batteries used for electric bicycle application, the influence of current low inventory situation on the downstream production is striking. It is estimated that more than 50% of electric bicycle makers will face supply shortage.
In addition, the quake in Japan has also affected the global supply chain in a way that Japanese makers are now gradually transferring their production capacity to China to diversify the risk and to maintain their global market shares.
Moreover, development and popularization of new energy vehicles will also have positive impact on demand for lithium batteries. Evidenced by a doubled number of lithium battery exhibitors at the 3rd China (Shanghai) International Battery Fair, the future development of the lithium battery industry is looking bright. In the next 3-5 years, technology advancement will help speed up growth of lithium batteries used for electric vehicles.