Two of China’s lead-acid battery giants have been accused of deliberately keeping EV battery prices low to keep out competition.
Tianneng Power and Chaowei Power Holdings own around 75% of the motive EV batteries market share, including bikes.
The China Association of Power Sources (CIAPS) has published an article from the Electric Vehicle Business Network, which asks why the two ‘oligarchs’ insist on keeping prices low.
“In China, the price of the lead-acid battery doesn’t depend on market demand; it depends on Chaowei and Tianneng,” claims the article.
“Why do they force the price down to the bottom line and make it difficult for themselves and the battery industry to survive?
“The reason is the battery industry has experienced three to four years of price war, but the war hasn’t cut production; instead, manufacturing capacity has increased and is actually three times the market demand.
“Thus, the two giants do not dare increase the battery price because that would lead to more companies entering the industry, and this would be a threat to the two giants.”
The number of lead-acid battery manufacturers in China was slashed by 90% after a cull by the government that began in 2010, wiping out hundreds of smaller firms and consolidating the larger ones.
Dong Li, chairman of Chinese lead-acid battery company Leoch, said the two companies only had an impact on the prices of electric bike batteries and not the lead-acid battery industry as a whole.
According to figures by metal market analyst Wood Mackenzie, Ebikes took up 40% of lead-acid battery use in 2010, a proportion which is expected to decline to 27% by 2020.
