In response to this issue, on January 25, the Ministry of Industry and Information Technology revised the "Standard Conditions for the Lithium Battery Industry" and the "Interim Measures for the Administration of Standard Announcements for the Lithium Battery Industry." The revised Standard Conditions for the Lithium Battery Industry and the Interim Measures for the Administration of Standard Announcements for the Lithium Battery Industry came into effect on February 15, 2019.
The revised "Standard Conditions" sets forth clear requirements for lithium battery production utilization and R&D capabilities, and proposes strict control over new lithium battery (including supporting facilities) projects that simply expand production capacity but have low technological levels. For new construction and expansion projects that are truly necessary to promote technological innovation, improve product quality, and reduce production costs, the industry's competent authorities shall strengthen the organization and evaluation in accordance with relevant regulations.
This means that the production of low-end batteries will be prohibited to some extent. It is understood that in the field of power lithium batteries, companies outside the top ten account for about 13% of the market demand, but account for about 55% of the total industry output. Moreover, most of these are low-end products, with a production utilization rate of only about 10%, which drags down the overall production utilization rate of the industry.
Therefore, the "Standard Conditions" require lithium battery companies to ensure that their actual output in the previous year is not less than 50% of their total output when submitting their applications. This requirement not only optimizes the industry environment but also improves production utilization and prevents idle production lines from wasting resources.
