Sichuan Plans to Construct a World-Class Lithium Battery Industry Base Planning An Output Value of Over RMB 800 Billion by 2027

Relying on rick lithium resources and hydropower, lithium battery industry chain gets rapid development in Sichuan. Striking while the iron is hot, Sichuan provincial government hopes to build a world-class lithium battery industry base, and plans an industry output value of over RMB 800 billion by 2027.

On September, 20th, Sichuan Department of Economy and Information Technology worked with six Departments to co-print Implementation Opinions on Promoting the High Quality Development of the Lithium Battery Industry to put forth the aforesaid goal. Department of Economy and Information Technology also expressed that it will accelerate capacity increase of lithium resource development in northwest Sichuan. The Department plans to construct a full lifecycle industrial cluster covering lithium battery material, battery manufacturing, system integration, terminal application, cascade development and recycling of waste battery. According to the aforesaid Opinions, a new round of technological revolution and industrial transformation have emerged. In order to consolidate the leading position of Sichuan lithium battery industry in China, Sichuan will develop lithium resource advantages into development advantages and economic advantages. Therefore, it is very necessary to issue related measures to promote the development of lithium battery industry.

Sichuan and Chongqing are rick in mineral resources. The lithium resource there occupies 20% of the whole country, just next to Jiangxi and Qinghai. Lithium battery industry there started a little late. Among all TOP 100 battery enterprises in China in 2019, Tianqi Lithium ranked the highest, ranking 23rd place. In September that year, Yibin, rich in lithium, successfully introduced CATL to construct a plant in local area. The both parties signed six phases of power battery projects, with total investment of over RMB 30 billion. A group of upstream and downstream enterprises were also attracted to support. Additionally, the sales volume of NEVs soared in domestic market, leading Sichuan lithium battery industry soaring correspondingly, mainly concentrating in Yibin, Chengdu, Suining.

According to the data from Sichuan Provincial Government, in 2022, the production of Sichuan power battery was 83 GWh, occupying 17% of the whole country. According to the plan, by 2025, the capacity hopefully will reach 400 GWh, and industry output value will exceed RMB 500 billion. 5 TOP 10 domestic giant power battery manufacturers, CATL, BYD, CALB, EVE Lithium and SVOLT, have constructed plants in local areas. Upstream resource, material and recycling enterprises, such as Canmax, Dynanonic, BTR, GEM and Chengxin Lithium are making deployments in local areas for the construction of industry clusters. CCID issued 2022 China Lithium Battery Industry Development Index, which indicates that Sichuan Province has been the popular destination for lithium investment. In 2022, Sichuan attracted lithium battery investment of over RMB 203.3 billion, occupying 11.3% of total investment in the whole country.

In order to help local enterprises to develop, Sichuan issues preferential tax policy. For example, in the first 5 months this year, CATL’s local subsidiary, Sichuan Era accumulatively enjoyed RMB tax preferences of 1.1 billion, covering export tax refund, consumption tax, urban maintenance and construction tax; Sichuan Era enjoyed tax relief of RMB 88 million thanks to Preferential Policies for Enterprise Income Tax in Western Development. In addition, the rick water power resources in Sichuan also is an important reason why lithium battery enterprises gather here. As of the end of 2022, total installed capacity of power generation in Sichuan achieved 128 million kw, including hydropower installed capacity of 102 million kw, occupying nearly 80% of total capacity in the province. In this August, new Battery Act of EU was put into effect, and will conduct carbon footprint tracking on the lithium batteries sold within the region. Therefore, how to reduce carbon emission during manufacturing might be an inevitable problem for lithium battery enterprises.

In March, 2022, CATL’ Yibin plant obtained zero-carbon plant certificate. According to Zhu Yunfeng, General Manager of Sichuan Era, Yibin is a city with rich water resources. With particularly favorable natural conditions, 80% of the plants in Yibin use hydropower, and save 400000 tons of carbon emission each year. In this June, SVOLT entered into zero-carbon Industry Park Agreement with Sichuan Dazhou Government. SVOLT plans to invest RMB 17 billion in constructing lithium iron phosphate and cobalt free cathode material production line and lithium iron phosphate precursor and electrolyte production line in high-tech zone of Dazhou; also constructing battery recycling and dismantling production line and related supporting facilities, thus constructing a closed loop industrial chain and ecological industrial park centering on batteries, and covering upstream and downstream development of lithium battery materials and lithium battery terminal.