ANL/ESD/08-1

Developments in
Lithium-Ion Battery Technology
in The Peoples Republic of China

Energy Systems Division

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 ANL/ESD/08-1

Developments in
Lithium-Ion Battery Technology
in The Peoples Republic of China

by
Pandit G. Patil
Transportation Technology Research and Development Center
Energy Systems Division, Argonne National Laboratory

sponsored by
Hybrid and Electric Systems, Vehicle Technologies Program,
Office of Energy Efficiency and Renewable Energy, DOE

January 2008
 CONTENTS

NOTATION.............................................................................................................................. vi

ACKNOWLEDGMENTS ........................................................................................................ viii

SUMMARY.............................................................................................................................. 1

1 INTRODUCTION .............................................................................................................. 7

1.1 Scope of the Study and Objectives ............................................................................ 7

1.2 Methodology and Approach ...................................................................................... 8
1.2.1 Overview and Discussion .............................................................................. 9
1.2.2 Lithium-Ion Battery Technology — Technology Discussion ....................... 9
1.3 Lithium-Ion Battery Thermal Management............................................................... 11
1.4 Air Cooling versus Liquid Cooling............................................................................ 12
1.5 Active versus Passive Systems .................................................................................. 13
1.6 Cooling-Only Systems versus Cooling and Heating Systems ................................... 13
1.7 Series versus Parallel Air Distribution....................................................................... 13
1.8 Thermal Management for Valve-Regulated Lead-Acid, NiMH, and
Lithium-Ion Batteries................................................................................................. 14
1.9 Heat Generation and Heat Capacity........................................................................... 15
1.10 Lithium-Based Batteries: Advantages and Challenges.............................................. 15

2 LITHIUM-ION BATTERIES: STATE OF THE ART ...................................................... 17

2.1 Performance and Life................................................................................................. 17

2.2 Cost ............................................................................................................................ 19
2.3 Lithium-Ion Battery Safety ........................................................................................ 21
2.4 Lithium-Ion Battery Industry in China ...................................................................... 22
2.5 International Standards for the Battery Industry........................................................ 22
2.6 International Market Competition.............................................................................. 23
2.7 Growth of Lithium-Ion Battery Technology in China............................................... 24
2.8 Key Raw Material ...................................................................................................... 24

3 LITHIUM-ION BATTERY TECHNOLOGY IN CHINA................................................. 26

3.1 Process to Identify Companies in China Developing Lithium-Ion

Battery Technology.................................................................................................... 28
3.2 Technology at Various Institutions in China ............................................................. 30
3.2.1 Tsinghua University....................................................................................... 30
3.2.2 China Electrotechnical Society ...................................................................... 31
3.2.3 CITIC Guoan MGL, MGL New Energy Technology Co., Ltd. .................... 32
3.2.4 Beijing Green Power Technology Co., Ltd. .................................................. 35
3.2.5 Tianjin Institute of Power Sources................................................................. 37

iii
 CONTENTS (CONT.)

3.2.6. Tianjin Lishen Battery Joint-Stock Co., Ltd.................................................. 40

3.2.7 Tianjin Lantian Double-Cycle Tech. Co., Ltd. .............................................. 41
3.2.8 Suzhou Phylion Battery Co., Ltd. .................................................................. 44
3.2.9 Tongji University, School of Automobile Engineering................................. 48
3.2.10 General Research Institute for Nonferrous Metals,
Institute of Energy Materials and Technology Lab of Li-ion Battery ........... 51
3.2.11 Beijing Institute of Technology, BTI EV Center of
Engineering and Technology ......................................................................... 53
3.3 Lithium-Ion Battery Manufacturing in China............................................................ 54
3.4 Joint Ventures and Partnerships................................................................................. 56
3.5 Government Policies.................................................................................................. 59
3.5.1 Renewable Energy Law ................................................................................. 60
3.5.2 Government Plan ........................................................................................... 60
3.5.3 Relevant Standards......................................................................................... 61
3.5.4 Regulatory Steps to Promote Cleaner Transport ........................................... 62
3.5.5 Example of Income Taxes and Incentives ..................................................... 63
3.6 Government Policies and HEV Standards ................................................................. 63

4 SUMMARY AND RECOMMENDATIONS..................................................................... 65

5 BIBLIOGRAPHY............................................................................................................... 67

APPENDIX A: ORGANIZATIONS REPRESENTED IN INTERVIEWS............................. 74

APPENDIX B: LITHIUM-ION BATTERY TECHNOLOGY PRESENTATION ................. 78

APPENDIX C: INTERVIEW QUESTIONS AND DISCUSSION TOPICS .......................... 84

APPENDIX D: CHINESE LITHIUM-ION BATTERY DEVELOPMENT

COMPANIES, CONTACTS, UNIVERSITIES, AND OTHER
ORGANIZATIONS ........................................................................................ 86

FIGURE

1 Process Used to Identify Companies in China Involved with Lithium-Ion Batteries......... 29

iv
 TABLES

1 Cathode Electrode Materials............................................................................................... 10

2 Heat Generation from Typical HEV/EV Modules Using NREL’s Calorimeter................. 14

3 Status of Lithium-Ion High-Energy/Medium-Power Cell and Battery Technologies ........ 17

4 Status of Lithium-Ion High-Power/Medium-Energy Cell and Battery Technologies ........ 18

5 Developers of Lithium-Ion Technology Cells for HEV Applications................................ 19

6 Characteristics of Lithium-Ion Cell/Module from Various Manufacturers ........................ 26

7 Tianjin Lantian Double-Cycle Tech. Co., Ltd., Cells for E-Bike Applications ................. 42

8 Tianjin Lantian Double-Cycle Tech. Co., Ltd., Cells for Power Tools and HEVs ............ 42

9 Details on Other Lithium-Ion Cells for E-Bikes................................................................. 43

10 Tianjin Lantian Double-Cycle Tech. Co., Ltd., Cells for Electric Motorcycles and
Other Electric Vehicles ....................................................................................................... 43

11 Summary of Tests Involving Charging Electric Cores with Constant

Current and Setting Upper Limit for Fixed Voltage........................................................... 45

12 Summary of Tests Involving Nail Penetration.................................................................... 46

13 Summary of Tests Involving Thermal Impact .................................................................... 47

14 Properties and Data from GRINM Lithium-Ion Batteries .................................................. 52

15 Guobiao Standards of the Battery Industry......................................................................... 61

v
 NOTATION

The following is a list of the abbreviations, acronyms, and units of measure used in this
document. (Some acronyms and abbreviations used only in tables may be defined only in those
tables.)

GENERAL ACRONYMS AND ABBREVIATIONS

ABAT Advanced Battery Technologies, Inc.

ASME American Society of Mechanical Engineers

BIT Beijing Institute of Technology

CATARC China Automotive Technology and Research Center

CE Conformité Européenne (French for “European Conformity”)

DOD depth of discharge

DOE U.S. Department of Energy

EV electric vehicle

GB Guobiao
GM General Motors (Corporation)
GRINM General Research Institute for Nonferrous Metals

HEV hybrid electric vehicle

IEC International Electrical Commission

MGL Mengguli Corporation (MGL)

MOST Ministry of Science and Technology

NLI nano-lithium-ion
NREL National Renewable Energy Laboratory

OVT Office of Vehicle Technologies Program

PHEV plug-in hybrid electric vehicle

PLI polymer lithium-ion
PRC Peoples Republic of China
PV photovoltaic

vi
QSTC Chemical and Physical Power Sources of China Ministry of Information
Industry

R&D research and development

RMB Ren Min Bi

SEI solid-electrolyte interface

SOC state of charge

UL Underwriters Laboratories
USABC U.S. Advanced Battery Consortia

VRLA valve-regulated lead-acid

OTHER ABBREVIATIONS

Li-ion lithium-ion
LiCoO2 lithiated cobalt-oxide
LiFePO4 LFP; lithiated iron phosphate (olivine)
LiMnO2 LMS; lithium manganese spinel
Li(Ni0.85Co0.1Al0.05)O2 NCH; lithiated mixed oxide of nickel, cobalt, and aluminium
Li(Ni1/3Co1/3Mn1/3)O2 NCM; lithiated mixed oxide of nickel, cobalt, and manganese
NiCd nickel cadmium
NiMH nickel metal hydride

vii
 ACKNOWLEDGMENTS

My heartfelt thanks go to Jinhua Zhang, Vice President; Hou Fushen, Director, Hi-tech
Development Department; and Zhao Chunming, Master Senior Engineer, all from the China
Automotive Technology & Research Center (CATARC), who provided first-rate help and
assistance with all the logistics involved in arranging meetings and moving to and from meetings
in a timely manner, making my visit to the Peoples Republic of China a success. Many thanks.

I would like to thank our sponsor, Tien Duong, Team Leader, Hybrid and Electric
Systems, Vehicles Technologies Program, Office of Energy Efficiency and Renewable Energy,
for his support and encouragement for undertaking this visit to study lithium-ion battery
technology in China.

Also, I very much appreciate the efforts of Dr. Larry R. Johnson, Director of the
Transportation Technology Research and Development Center at Argonne National Laboratory,
and my colleagues, Dr. Michael Q. Wang and Dr. Danilo J. Santini, toward guiding me to make
this visit a success and preparing me to conduct this lithium-ion battery study.

I also thank Kevin A. Brown, Argonne's Technical Services Division (TSD), for his help
in preparing and coordinating the production of this report, and Vicki Skonicki, also of TSD, for
document production.

viii
 1

SUMMARY

Lithium-ion battery technology is widely used in portable electronics products, such as

cell phones, camcorders, and portable computers. At present, this technology is gaining
worldwide attention as a battery option for transportation applications, including electric vehicles
(EVs), hybrid vehicles, plug-in hybrid vehicles (PHEVs), fuel cell vehicles, and electric bikes in
Asia.

The United States continues to lead in the research and development of lithium-ion
technology. There is a strong research and development program funded by the U.S. Department
of Energy and other federal agencies, such as the National Institute of Standards and Technology
and the U.S. Department of Defense. However, in Asia, countries like China, Korea, and Japan
are commercializing and producing this technology. China has over 120 companies involved in
the production of lithium-ion battery technology. The following are highlights and conclusions
based on the information provided in this report:

• Lithium-ion batteries offer higher power and energy per unit weight and
volume and better charge efficiency than nickel metal hydride (NiMH)
batteries. These attributes allowed them to capture a major part of the portable
rechargeable battery market within a few years of their introduction and to
generate global sales estimated at $5 billion in 2006.

• Battery temperature affects battery performance and life. Therefore, battery

thermal management is critical to achieving desired performance and calendar
life for battery packs in hybrid electric vehicles. Automakers and their
suppliers are paying increased attention to battery thermal management to
ensure that warranty costs for battery replacement do not exceed projections.
The battery in a hybrid electric vehicle (HEV) experiences a demanding
thermal environment and must be heated during cold-weather operation and
cooled during extended use and during warm-weather operation.

• Mass-manufacturers of lithium-ion cells for consumer products are now

engaged in the development of lithium-ion chemistries for HEV and PHEV
applications, with commercialization possible as early as 2010. The major
impediment to developing lithium-ion batteries for PHEVs appears to be that
the PHEV battery requirements are not clearly defined at this time.

• Battery thermal management is critical to achieving performance and

extended battery life in electric and hybrid vehicles under real driving
conditions. To find a high-performance and cost-effective cooling system,
system thermal response and its sensitivity must be evaluated as a function of
controllable system parameters.

• A well-designed thermal management system is required to regulate electric

vehicle (EV) and HEV battery pack temperatures evenly, keeping those within
 2

the desired operating range. Production HEVs require an active

heating/cooling battery temperature monitoring system to allow them to
operate in hot and cold climates. Proper thermal design of a module has a
positive impact on overall pack thermal management and its behavior.

• A key attraction of lithium-based batteries is the high cell voltage, which is

the direct result of the highly negative potential of lithium. With currently
used mixed oxide positives, the operating voltage range of lithium-ion cells is
approximately 2.75 to 4.2 V. The nominal (average) discharge voltage is
about 3.6 V, and most of the usable cell capacity is delivered between 4.0 and
3.5 V.

• The calendar life of high-power lithium-ion battery cells is expected to have

the same basic dependence on temperature as high-energy cell designs,
because several of the high-power cell technologies use the same basic
chemistry as larger cells and thus are subject to the same kind of degradation
processes.

• The current cost of lithium-ion HEV batteries made with early pilot
equipment is around $2,000/kWh. If the current designs were brought to
volume production, the cost is anticipated to drop to approximately
$1,000/kWh.

• In the past three to four years, companies outside of the Peoples Republic of
China (PRC) have been bringing advanced battery technologies to the PRC
and setting up partnerships and/or joint ventures to manufacture batteries for
these and other applications (such as electric bikes, EVs, and HEVs) to take
advantage of low labor cost and incentives provided by the Chinese
government. Companies in the PRC are very aggressive in developing
manufacturing processes for the batteries export market.

• From 2001 to 2004, the number of battery companies in China increased from
455 to 613; accordingly, the number of employees in those industries also
increased from 140,000 in 2001 to 250,000 in 2004. The total output reached
63.416 billion Yuan ($8.1 billion) in 2004, which is an increase of 52.58%
over 2001.

• The sales of large-scale companies in the battery industry was 59.818 billion
Yuan ($7.65 billion) in 2004 — this was an increase of 52.85% in comparison
with 2003, an increase of 105.32% in comparison with 2002, and an increase
of 160.93% in comparison with 2001. This growth is attributed to the growth
of large companies. In the last four years, the debt-to-asset ratio of China’s
battery industry has been fluctuating between 54 and 59%.
 3

• The most commonly used battery industry standards in China for testing and
evaluating battery technologies are those from the International Electrical
Commission (IEC).

• Along with the rapid growth of lithium-ion battery manufacturers in China,

companies like the BYD Company Limited; Tianjin Lishen Battery Joint-
Stock Co., Ltd.; Shenzhen BAK Battery Co., Ltd.; and Shenzhen B&K
Technology Co., Ltd., are increasing their share of the market. In 2004, the
domestic and overseas markets for lithium-ion batteries were flourishing —
the export volume was 189 million units, with an increase of 16.3% in sales.
As a result of the rapid increase in domestic demand, the import volume of
lithium-ion batteries was 550 million units, with an increase of 23.43% in
sales in 2004.

• At present, Chinese lithium-ion battery manufacturing companies are

relatively well developed. Such manufacturers as the BYD Company Limited;
Shenzhen BAK Battery Co., Ltd.; and Shenzhen B&K Technology Co., Ltd.,
enjoy a large share of the global battery market. During 2003–2004, the
Chinese lithium-ion battery industry developed dramatically. The production
of cobalt acid lithium and nickel acid lithium and the invention of new
manufacturing techniques to extract lithium from salty lakes will drastically
reduce the need to import anode materials for lithium batteries from abroad.

• Most Chinese companies are producing lithium-ion batteries for portable

applications. Large companies have undertaken research and development
with the help of joint ventures and/or partnerships with companies from Japan,
Europe, and the United States.

• Lithium resources are abundant in China. As of 2000, China was the second
largest producer of lithium in the world, and in 2004, it produced
18,000 metric tons.

• Lithium-ion battery packs for e-bikes range from 24 to 37 V and have a

capacity of 5–60 A•h. The market for lithium-ion e-bikes in China is still
small. In Japan and Europe, however, lithium-ion and NiMH are the dominant
battery types, although annual e-bike sales (200,000/yr and 100,000/yr,
respectively) are significantly less than those in China.

• Tsinghua University’s focus is research on EVs, HEVs, PHEVs, and fuel cell
electric vehicles (FCEVs), with an emphasis on battery applications. The
university has six patents and four applications pending in China on battery
thermal management, EV controller design, and electronics for vehicles.
University staff is interested in developing a relationship with a U.S. bus
manufacturer, fuel cell developer, and hydrogen storage company.
 4

• CITIC GUOAN Mengguli Corporation (MGL); MGL New Energy

Technology Co., Ltd.; Green Power Co.; Tianjin Lintian Double-Cycle Tech.
Co.; Suzhou Phylion Battery Co., Ltd.; Tianjin Lishen Battery Joint-Stock
Co., Ltd.; and Tongji University are willing and interested in providing cells,
modules, and packs for benchmarking in the United States. However, these
organizations would want to see a test plan up front and would like to keep
their test data out of the public domain.

• The China Electrotechnical Society has 123,000 members. The society is a

clearinghouse for electrotechnical research. It conducts studies on battery
technology markets for EVs and HEVs. Recently, it completed a preliminary
technology study on fuel cells and fuel cell hybrid vehicles for its membership
and the Chinese government. It was learned that the Chinese government
emphasizes the development of lithium-ion battery technology for vehicular
applications. The Chinese government is providing incentives and grants for
Chinese-owned and Chinese-operated companies — amounting to as much as
75% of the total cost, which covers most operating and capital expenses. For
small companies, these incentives can be upwards of 85%.

• MGL ranks as China’s largest manufacturer of the lithium-ion battery cathode

material LiCoO2, and it will be the first to market the new cathode materials
LiMn2O4 and LiCoO0.2Ni0.8O2. MGL emphasizes quality control, and has
passed the certification of both New and Hi-Tech Enterprise standards and
IS09001:2000. With its own synthesis method, MGL claims it produces
cathode materials of superior performance and reliability in an
environmentally friendly way. Since incorporation, MGL has held a
monopoly in China’s lithium-ion battery cathode materials market and now is
at the forefront of the industry. Besides cathode materials, MGL also produces
lithium-ion secondary batteries of high energy density and high capacity for
power and energy storage — the capacity ranges from several ampere-hours
to several hundred ampere-hours. As China’s first power battery
manufacturer, MGL leads in marketing high-capacity lithium-ion secondary
batteries, which are used in the Beijing Municipality’s trial electric bus fleet.

• Tianjin Institute of Power Sources is one of the two national laboratories

involved in battery testing and evaluation activities and programs. This testing
center of chemical and physical power sources of the Ministry of Information
Industry of China was established in 1985. It is considered the largest, most
comprehensive, most authoritative, independent quality-testing center for
chemical and physical power sources.

• Tianjin Lishen Battery Joint-Stock Co., Ltd., was established in 1998. It has a
capitalization of 600 million Ren Min Bi (RMB) ($80.00 million), and a total
investment of 1.5 billion RMB ($200.00 million). The production of lithium
cells is completely automatic — representing the most automated production
 5

line for lithium-ion batteries in China. The production equipment is imported

from Japan.

• At its School of Automotive Engineering, Tongji University has world-class

facilities to integrate advanced batteries and fuel cells in vehicles and to
conduct basic and applied research for the automotive industry. These testing
capabilities cover research, testing, and evaluation. The school is collaborating
research with lithium battery development companies, fuel cell development
companies, and domestic and foreign automobile companies.

• Suzhou Phylion Battery Co., Ltd., is a battery technology corporation set up

by Legend Capital Co., Ltd.; the Institute of Physics of the Chinese Academy
of Sciences; and Chengdu Diao Group. Suzhou Phylion Battery Co., Ltd., has
82 million RMB ($10.93 million) and a staff of more than 400. The company
specializes in manufacturing and selling lithium-ion cells with high capacity
and current. Its technology is primarily used in defense, electric bicycles,
lighting, portable electronics, medical equipment, and battery-operated tools.

• The General Research Institute for Nonferrous Metals (GRINM), established

in 1952, is the largest research and development (R&D) institution in the field
of nonferrous metals industry in China. GRINM is conducting basic research
on the materials needs and requirements for high-energy and high-power
lithium-ion battery technology. GRINM has focused on nanotechnology and
LiMn2O4 materials for the cathode, graphite for the anode, and
PC+DC+DMC+1m Li P F6 liquid electrolyte and polypropylene/
polyethylene/polypropylene separator for the development of a lithium-ion
battery cell. GRINM developed all materials in-house except for the separator,
which GRINM imports from Japan and the United States.

• The production and manufacturing of lithium-ion batteries has expanded

enormously in the past two to three years. These batteries are widely used in
consumer electronics devices, such as cellular phones, camcorders, and
portable computers. This market is growing fast and is second only to that of
information technology. At companies we visited, we saw batteries
manufactured by a wide variety of processes — from manual production to
full automation. Labor cost also plays a significant role in manufacturing
lithium-ion batteries. Currently, China has between 275,000 and 325,000
workers in the battery industry. Labor costs in China are very low compared
with those in Japan and western countries. Some 435 batteries companies in
China are producing batteries. In 2006, their total output was 78.7 billion
Yuan.

• Western and Japanese companies are setting up joint ventures and/or

partnerships with Chinese battery companies, taking advantage of widespread
incentives available to Chinese companies. Chinese companies receive more
incentives in producing batteries for export. Today, Chinese companies are
 6

providing batteries for electronic and portable applications worldwide.

Because the initial investment to produce lithium-ion batteries is very high,
producing them in China makes sense for Japanese and western companies.

• The rechargeable lithium battery is a new technology in the energy field

supported greatly by the Chinese government. Since the initiation of China’s
“863 Program” in 1987, the Ministry of Science and Technology has
organized the research and development of the key materials and technologies
for NiMH and lithium-ion batteries. These batteries are produced on a large
scale, particularly for export.

• In its new five-year plan (2006–2010), the Chinese government outlines steps
to boost efficiency and reduce pollution. A number of clear targets for
increasing energy efficiency are set (e.g., to increase total energy efficiency by
20% and to achieve an energy mix of at least 20% renewable energy by 2020).
The Chinese government is also introducing clear policy standards:

1. Starting April 1, 2006, buyers of new, large cars paid 20% more sales tax
than those of new, small cars, and buyers of even smaller cars paid 1%
less in sales tax.

2. In 2006, parking fees in central Beijing were doubled.

3. The gasoline price for consumers increased by about 20% during 2006.

4. In December 2005, tighter vehicle standards were approved.

On the whole, the PRC is making vast progress in manufacturing lithium-ion battery
technology. The government has a national program in place to attract foreign companies to set
up joint ventures and/or partnerships with Chinese companies. The Chinese government offers
large incentives to Chinese companies that produce batteries for export. The Chinese government
also gives Chinese-owned companies additional incentives to conduct research and provides
capital for manufacturing lithium-ion batteries for all applications.
 7

1 INTRODUCTION

Argonne National Laboratory prepared this report, under the sponsorship of the Office of
Vehicle Technologies (OVT) of the U.S. Department of Energy’s (DOE’s) Office of Energy
Efficiency and Renewable Energy, for the Vehicles Technologies Team. The information in the
report is based on the author’s visit to Beijing; Tianjin; and Shanghai, China, to meet with
representatives from several organizations (listed in Appendix A) developing and manufacturing
lithium-ion battery technology for cell phones and electronics, electric bikes, and electric and
hybrid vehicle applications. The purpose of the visit was to assess the status of lithium-ion
battery technology in China and to determine if lithium-ion batteries produced in China are
available for benchmarking in the United States. With benchmarking, DOE and the U.S. battery
development industry would be able to understand the status of the battery technology, which
would enable the industry to formulate a long-term research and development program. This
report also describes the state of lithium-ion battery technology in the United States, provides
information on joint ventures, and includes information on government incentives and policies in
the Peoples Republic of China (PRC).

1.1 SCOPE OF THE STUDY AND OBJECTIVES

The scope of this study is (1) to determine the state of the art and current production of
lithium-ion batteries in China and (2) to develop recommendations for DOE with respect to
battery benchmarking and testing of candidate batteries for use in hybrid and plug-in hybrid
vehicles. China is the largest country in the world, and its economy is growing rapidly. Because
of the demand for world oil supplies, the United States is interested in the capabilities of Chinese
manufacturers of motor vehicles to produce and use state-of-the-art, energy-efficient vehicles.
Although there are significant issues of competitive concern, there are also reasons to hope that
multiple nations will have the ability to produce high-quality, interchangeable battery packs for
future plug-in hybrid vehicles. The Chinese government is developing its industry and
universities to carry out the research and development (R&D) in lithium-ion battery technology
for portable and electric vehicle applications. An estimated 400 organizations in China are
involved in battery development or manufacturing; however, manufacturers of lithium-ion
batteries represent an unknown fraction of this total.

Some U.S. and Chinese companies have begun to develop joint relationships to conduct
R&D and manufacturing of advanced vehicle technologies. The study described in this report on
Chinese lithium-ion battery technology could help U.S. companies focus on technologies for
which the United States has a competitive advantage. By properly selecting the best Chinese
batteries for possible follow-up benchmarking and testing, this study has the potential to
strengthen both U.S. and Chinese programs by avoiding undesirable duplication of effort,
helping both nations to focus on their strengths with respect to the manufacturing and
development of lithium-ion batteries.

Further, DOE’s OVT Program always strives to determine the best technologies available
for potential use by U.S. automobile manufactures and to build the capability of domestic
 8

manufacturers to produce competitive or superior technologies. Similarly, the Energy Storage

effort within OVT — through battery testing and benchmarking of Japanese batteries — has also
provided U.S. manufacturers and customers with a degree of assurance about the reliability of
battery technologies. In the process, the Energy Storage effort has helped provide domestic
manufacturers information needed to support internal decisions to proceed with programs to
develop hybrid and plug-in hybrid vehicles. Greater confidence in the ultimate marketability of
hybrid powertrain technologies will help ensure the success of the vehicle development program.

The purpose of this study is consistent with past efforts of the U.S. Advanced Battery
Consortia (USABC) and FreedomCAR Partnership for the development of battery technologies
— which will benefit from the results of this study. It provides a lithium-ion battery technology
assessment specific to China, as well as information on contacts with key organizations and
manufacturers. As DOE embarks on a new “Plug-In Hybrid Initiative,” this study identifies
lithium-ion battery technologies compatible with powertrain technologies being developed in the
United States, increasing the likelihood that such powertrains can help reduce the rate of growth
in oil consumption.

1.2 METHODOLOGY AND APPROACH

Five battery research and testing organizations, one battery technology society, and five
companies conducting research and development of lithium-ion battery technology (as well as
manufacturing lithium-ion batteries) were visited in the PRC. During this visit, 28 interviews
were conducted (Appendix A). A presentation was made to each of these organizations on the
status of lithium-ion battery technology for electric, hybrid, and plug-in hybrid applications in
the United States (see Appendix B). The interviewed individuals included those from industry,
government laboratories, and academia. Individuals interviewed from industry included
representatives from materials suppliers and representatives from battery manufacturers serving
in technology development, management, and marketing positions. Each interviewee received a
list of questions in advance that served as a guide to the interview process. (Appendix C lists the
questions used to guide the personal interviews.) Interviews did not always follow the sequence
of the listed questions. The interviews were conducted in a relaxed setting and in a
conversational manner, which helped the experts to focus on what they considered to be the most
important factors influencing the development of lithium-ion battery technology and the
decisions of manufacturers about the production of lithium-ion batteries. Responses from those
interviewed helped Argonne identify and analyze developments in lithium-ion battery
technology in the PRC and to obtain information about cost estimates and manufacturing
capabilities.

The initial contacts in the United States were made by attending advanced battery
technologies meetings, seminars, and conferences, such as the Advanced Automotive Battery
Conference 2007. The contacts and conferences provided information on developments in
lithium-ion battery technology in the United States, Europe, and Asia. These conferences were
extremely useful in understanding the status of lithium-ion batteries, in comparison with
activities related to lithium-ion batteries in the PRC.
 9

1.2.1 Overview and Discussion

Lithium-ion batteries offer higher power and energy per unit weight and volume, as well
as a better charge efficiency, than NiMH batteries. These attributes allowed them to capture a
major part of the portable rechargeable battery market within only a few years of their intro-
duction and to generate global sales estimated at $5 billion in 2006. Nevertheless, the tolerance
of lithium-ion technology to abuse is still questionable, its reliability for automotive applications
is not proven, and currently, its cost is higher than that of NiMH. Over the last five years, most
automakers have started to evaluate the suitability of lithium-ion batteries for hybrid electric
vehicle (HEV) applications, and some have even embarked on significant in-house lithium-ion
battery development projects. In the future, the lithium-ion battery is likely to become the battery
of choice for most hybrid applications. When exactly this will happen for each of the hybrid
vehicles is a question that automakers, battery developers, their supply chains, and the many
industry stakeholders and observers are struggling to answer.

1.2.2 Lithium-Ion Battery Technology — Technology Discussion

Mass-manufacturers of lithium-ion cells for consumer products are now engaged in the
development of lithium-ion chemistries for HEV and plug-in hybrid electric vehicle (PHEV)
applications, with possible commercialization as early as 2012. The major impediment to
developing lithium-ion batteries for PHEVs appears to be that the requirements for PHEV
batteries are insufficiently defined at this time. The apparent interest in PHEVs by General
Motors Corporation (GM) might stimulate efforts to develop lithium-ion technology for PHEV
applications. Several companies in Europe and Japan have been developing medium- and high-
energy lithium-ion technologies, some of them based on advanced materials, chemistries, and/or
manufacturing techniques. Their strategy is to pursue limited-volume applications and markets
that may be emerging, especially for small battery-powered electric vehicles (EVs); electric
bikes; and, more recently, PHEVs. Several of these companies hold the view that lithium-ion-
powered PHEVs and small battery-powered electric vehicles will be able to match the life-cycle
cost-competitiveness of conventional vehicles in urban fleet applications, and a few have
established cell-production capacities for hundreds to a few thousand of 10–25-kWh batteries per
year, which may be sufficient for demonstration fleets.

As the lightest metal and most electronegative element, lithium is the most attractive
negative electrode material for high-energy batteries. However, its high reactivity with water and
with the solvents used in organic battery electrolytes has prevented its use in rechargeable
batteries until two important discoveries were made about 15 years ago: lithium can be inserted
(“intercalated”) electrochemically in carbon “host” materials, and a protective layer forms at the
interface of the lithium-containing carbon with the organic electrolyte solvent when a cell is
charged for the first time. Remarkably, this complex solid-electrolyte interface (SEI) layer
prevents further attack of the electrolyte by lithium but allows the passage of lithium ions during
charge-discharge cycling. The host material forming the negative electrode in lithium-ion cells is
made from special grades of graphite and/or coke. Mixed with binders, these carbons are
deposited on thin copper sheets that serve as conducting supports. A variety of materials can be
paired with carbon-based negatives in battery cells by using organic electrolytes. Mixed with
 10

carbon for increased conductivity and with binders, these materials are deposited on thin
aluminum sheets as conducting supports. Currently established cathode electrode materials are
listed in Table 1 and are reviewed below in the context of current lithium-ion battery technology.

LiCoO2: Lithiated cobalt oxide is the main component of the positive electrodes in
lithium-ion cells produced on a very large scale for consumer product applications. It has good
storage capacity for lithium ions, adequate chemical stability, and good electrochemical
reversibility. However, it is relatively more expensive per kilowatt-hour of storage capacity than
other oxides and is therefore not a good candidate for automotive applications of lithium-ion
batteries that are under severe cost constraints.

Li(Ni0.85Co0.1Al0.05)O2: Commonly termed NCA, this lithiated mixed oxide of nickel,

cobalt, and aluminum has become accepted for batteries in prototypical HEV, full performance
battery electric vehicle, and the PHEV. It approaches the favorable characteristics of LiCoO2 at a
lower per-kilowatt-hour cost.

Li(Ni1/3Co1/3Mn1/3)O2: Often termed NCM, this lithiated mixed oxide of nickel, cobalt,
and manganese is potentially less expensive than NCA. It can be charged to two cell voltage
levels. At the higher voltage (e.g., 4.1–4.2 V), NCM yields excellent storage capacity and
relatively low per-kilowatt-hour cost but tends to degrade through the dissolution of manganese;
at lower voltage, its capacity is substantially less and the per-kilowatt-hour cost is higher, but
stability appears adequate.

TABLE 1 Cathode Electrode Materials

Material
Active Material Storage Normal Cost Range
Chemical Formula Capacity Voltage
(discharged state) (mA•h/g) (V) Wh/kg Wh/L ($/kg) ($/kWh)

LiCoO2 145 4.0 602 3,073 30–40 57–75

Li(Ni0.85Co0.1Al0.05)O2 160 3.8 742 3,784 28–30 50–55
Li(Ni1/3Co1/3Mn1/3)O2 120 3.85 588 2,912 22–25 30–55
LiMnO2 100 4.05 480 2,065 8–10 20–25
LiFePO4 150 3.34 549 1,976 16–20 25–35
Notes:
• Lower potential can provide greater stability in electrolyte
• Cobalt oxide is most widely used in consumer cells but recently too expensive;
LiMn1/3Co1/3Ni1/3O2 newer than LiNiCoO2
• Mn2O4 around for many years – not competitive for consumer – good for high power
• LiFePO4 – very new – energy density too low for consumer electronics – safe on overcharge;
however, need electronics to prevent low voltage
 11

LiMnO2: Lithium manganese spinel, denoted LMS, is more stable than cobalt oxide and
nickel oxide-based positives in lithium-ion cells because the spinel crystal structure is inherently
more stable and has no or little excess lithium ions in the fully-charged state. Thus, it provides
very little lithium for undesirable lithium metal deposition on the negative electrode in
overcharge. Also, the threshold of thermal decomposition of the charged (lithium-depleted)
material is at a considerably higher temperature than that of other positive electrode materials.
Despite its lower specific capacity, the expected substantially lower per-kilowatt-hour cost will
make LMS attractive, if the efforts to stabilize the material against electrochemical dissolution of
its manganese content are successful.

LiFePO4: Lithiated iron phosphate (olivine), denoted LFP, is now being used
successfully as a potentially lower-cost positive electrode material. Because of its lower
electrochemical potential, LFP is less likely to oxidize the electrolyte solvent and thus is more
stable, especially at elevated temperatures. Doping is used to increase the conductivity and
stability of this promising material.

The electrolyte used in lithium-ion battery cells is a solution of a fluorinated lithium salt
(typically LiPF6) in an organic solvent, enabling current transport by lithium ions. Separators are
usually microporous membranes made of polyethylene or polypropylene. Because of the low
conductivity of organic electrolytes, adequate cell and battery power can be realized only with
electrodes and separators that are much thinner than those used in aqueous-electrolyte batteries.
The need for thin electrodes has made spiral winding of positive electrode-separator negative
electrode composites the preferred method for the fabrication of lithium-ion cells, but flat cell
configurations packaged in soft plastic (often metallized) enclosures are now gaining acceptance.

1.3 LITHIUM-ION BATTERY THERMAL MANAGEMENT

Battery thermal management is critical in achieving adequate performance and extending

life of batteries in electric and hybrid vehicles under real driving conditions. Designing a battery
thermal management system for given HEV/PHEV battery specifications starts with answering a
sequence of questions:

• How much heat must be removed from a pack or a cell?

• What are the allowable temperature maximum and difference?
• What kind of heat transfer fluid is needed?
• Is active cooling required?
• How much would the added cost be for the system?

To find a high-performance and cost-effective cooling system, it is necessary to evaluate the

system thermal response and its sensitivity as a function of controllable system parameters.

Battery temperature affects battery performance and life. Therefore, battery thermal
management is a critical element for achieving the desired performance and calendar life for
battery packs in HEVs. Automakers and their suppliers are paying increased attention to battery
thermal management to ensure that warranty costs for battery replacement are reasonable. The
 12

battery in an HEV experiences a demanding thermal environment and may need to be heated
during cold-weather operation and cooled during extended use and during warm-weather
operation. A uniform temperature should be maintained among the battery’s cells because cell-
to-cell temperature variability leads to imbalances and reduced performance and it potentially
reduces calendar life.

In the thermal design process, researchers should consider the cell-to-cell variability in a
multi-cell pack, which could lead to different battery electrical and thermal behavior. There is
also variability in the mechanical design and method for heating or cooling each cell. Also
during the thermal design process, researchers should consider the impact of various design
parameters, such as state of charge (SOC), internal resistance, current amplitude, heat-generation
rate, fluid flow rate, cooling/heating fluid temperature, and various geometrical variations. The
goals of a battery thermal management system are to keep the battery below a certain
temperature and to minimize the temperature variation in the pack while using a minimum
amount of energy.

1.4 AIR COOLING VERSUS LIQUID COOLING

The choice of a heat-transfer medium has a significant impact on the performance and
cost of the battery thermal-management system. The heat-transfer medium could be air, liquid, a
phase-change material, or any combination of these media. Heat transfer with air is achieved by
directing/blowing the air across the modules. However, heat transfer with liquid could be
achieved by using discrete tubing around each module, using a jacket around the module,
submerging modules in a dielectric fluid for direct contact, or placing the modules on a liquid
heated/cooled plate (heat sink). If the liquid is not in direct contact with modules, such as in
tubes or jackets, the heat-transfer medium could be water/glycol or even refrigerants, which are
common automotive fluids. If modules are submerged in the heat-transfer liquid, the liquid must
be dielectric, such as silicon-based or mineral oils, to avoid any electrical shorts.

Using the air as the heat-transfer medium may be the simplest approach, but it may not be
as effective as heat transfer by liquid. The rate of heat transfer between the walls of the module
and the heat-transfer fluid depends on the thermal conductivity, viscosity, density, and velocity
of the fluid. For the same flow rate, the heat-transfer rate for most practical direct-contact liquids
(such as oil) is much higher than that with air because of a thinner boundary layer and a higher
fluid thermal conductivity. However, because of oil’s higher viscosity and associated higher
pumping power, a lower flow rate is usually used, making the heat-transfer coefficient of oil only
1.5–3 times higher than that of air. Indirect-contact heat-transfer liquids (such as water or
water/glycol solutions) generally have a lower viscosity and a higher thermal conductivity than
most oils, resulting in higher heat-transfer coefficients. However, because the heat must be
conducted through walls of the jacket/container or fins, the effectiveness of indirect contact
decreases.
 13

1.5 ACTIVE VERSUS PASSIVE SYSTEMS

Because of cost, mass, and space considerations and their use in mild climates, battery
packs in early vehicles — particularly EVs — did not use heating or cooling units and depended
on the blowing of ambient air for the rejection of heat from the batteries. Early prototype HEVs
also used passive ambient air-cooling. Current production HEVs (Honda Insight and Toyota
Prius) use cabin air for cooling/heating of the pack. Although the ambient air is heated and
cooled by the vehicle’s air-conditioning or heating system, it is still considered to be a passive
system. For passive systems, the ambient air must have a mild temperature (10–35°C) for the
thermal management to work; otherwise, the performance of the pack can suffer in very cold or
very hot conditions. Outside of these conditions, active components (such as evaporators, heating
cores, engine coolant, or even electric and fuel-fired heaters) are needed.

1.6 COOLING-ONLY SYSTEMS VERSUS COOLING AND HEATING SYSTEMS

Electric vehicles were initially aimed for the mild to warm climate of California. Battery
performance is generally better at higher temperature; however, battery life can decrease with
higher temperature. Therefore, batteries in those EVs needed to be cooled only, and there was no
need for too much heating. At cold temperatures (below –10°C), the energy/power capability of
most batteries diminishes, and electric vehicle (EV) and HEV performance diminishes as well.
Heating systems have been used for EVs operating in colder climates. For EVs, there is no
engine to aid in heating the battery pack, so the heat rejected from motor and power electronics
and electricity from the battery could be used for heating; otherwise, a fuel-fired heater could be
considered. For HEVs, the heat from the engine could be used, but it would take some time
(more than 5 min) for the engine to start warming the batteries. Because power from the battery
is needed much sooner, self-heating battery technology could be an option. Cooling the batteries
is a less-challenging task than heating because the vehicle’s air-conditioning/refrigerant system
or engine coolant could be used. Energy use, however, increases with the use of refrigeration,
which is contrary to the HEV goal of improving fuel economy.

1.7 SERIES VERSUS PARALLEL AIR DISTRIBUTION

There are two methods for distributing air to a pack for cooling and/or heating. The first
method is series cooling, in which air enters from one end of the pack and leaves from the other,
exposing the same amount of air to several modules. The second method is parallel cooling, in
which the same total airflow is split into equal portions, and each portion flows over a single
module. Depending on the size and geometry of the modules, a series-parallel combination could
be configured. Generally, parallel airflow provides a more even temperature distribution among
the modules in a pack. The packs in GM’s EV1, Toyota’s RAV4-EV, Honda’s Insight HEV, and
Toyota’s Prius (Japanese version) all have either series or series-parallel air distribution. The
Toyota Prius (North American version) uses a pure parallel air distribution system or even-
temperature distribution. In parallel flow design, distributing airflow uniformly to a large battery
pack requires a careful design of the air manifold.
 14

1.8 THERMAL MANAGEMENT FOR VALVE-REGULATED LEAD-ACID, NiMH,

AND LITHIUM-ION BATTERIES

The relative need for the thermal management of each of the valve-regulated lead-acid
(VRLA), nickel metal hydride (NiMH), and lithium-ion batteries depends on the heat-generation
rate from each type of battery, its energy efficiency, and the sensitivity of performance to
temperature. From Table 2, it can be seen that NiMH batteries generate the most heat at high
temperatures (>40°C) and are the least efficient. At room temperature, NiMH generates less heat
than VRLA and lithium-ion batteries. The performance of a NiMH battery is more sensitive to
temperature than VRLA and lithium-ion batteries. Therefore, NiMH batteries need a more
involved battery management control. This is also evident from various efforts to use the more
effective liquid cooling for NiMH batteries. The concerns for lithium-ion packs are safety and
their relatively poor performance at very cold temperatures. Because lithium-ion batteries can
deliver much more power and thus more heat for the same volume than either VRLA or NiMH,
heat removal must be efficient. Thermal management also depends on the type of vehicle and the
location of the pack. For EVs and series HEVs, the pack is generally large, and its thermal
management system may need to be more elaborate ― possibly incorporating liquid cooling
(particularly for NiMH). However, for parallel HEVs, the pack is generally smaller, and the
thermal control could be achieved by a simpler air cooling/heating design, especially for lithium-
ion and VRLA batteries.

TABLE 2 Heat Generation from Typical HEV/EV Modules Using NREL’s

Calorimeter

Heat Generation
W/Cell

Battery Type Cycle 0°C 22–25°C 40–50°C

VRLA, 16.5 A•h C/1 Discharge, 100% to 0% SoCa 1.21 1.28 0.4
VRLA, 16.5 A•h 5C Discharge, 100% to 0% SoC 16.07 14.02 11.17
NiMH, 20 A•h C/1 Discharge, 70% to 35% SoC - 1.19 1.11
NiMH, 20 A•h 5C Discharge, 70% to 35% SoC - 22.79 25.27
Lithium-Ion, 6 A•h C/1 Discharge, 80% to 50% SoC 0.6 0.04 -0.18
Lithium-Ion, 6 A•h 5C Discharge, 80% to 50% SoC 12.07 3.50 1.22
a SOC = state of charge.

A well-designed thermal management system is required to regulate EV and HEV battery

pack temperatures evenly, keeping them within the desired operating range. Production HEVs
require an active heating/cooling battery temperature monitoring system to allow them to operate
in hot and cold climates. Proper thermal design of a module has a positive impact on the overall
management and behavior of the pack. A thermal management system using air as the heat-
transfer medium is less complicated, although also less effective, than a system using liquid
cooling/heating. Generally, for parallel HEVs, an air thermal management system is adequate,
whereas for EVs and series HEVs, liquid-based systems may be required for optimum thermal
 15

performance. The NiMH batteries require a more elaborate thermal management system than
lithium-ion and VRLA batteries. Lithium-ion batteries also need a good thermal management
system because of safety and concerns about low-temperature performance. The location of the
battery pack may also have a strong impact on the type of battery thermal management and
whether the pack should be air-cooled or liquid-cooled.

1.9 HEAT GENERATION AND HEAT CAPACITY

The magnitude of the overall heat-generation rate from a battery pack under load dictates
the size and design of the cooling system. The heat generation (due to electrochemical enthalpy
change and electrical resistive heating) depends on the chemistry type, construction, temperature,
state of charge, and charge/discharge profile. At the National Renewable Energy Laboratory
(NREL), a custom-built calorimeter to measure the heat generation from cells/modules with
various cycles, states of charge, and temperatures is used. Table 2 shows some typical results for
various batteries from an experiment by NREL. These and other data show that, for the same
current draw, a NiMH battery generates more heat than VRLA or lithium-ion batteries at
elevated temperatures (>40°C). Heat generation from VRLA and lithium-ion batteries is roughly
the same for similar currents. At room temperature, less heat is generated for NiMH for the same
current, but NiMH is not as energy-efficient. Generally, as temperature decreases, more heat is
generated because of an increase in resistance in the cells. As the discharge rate increases, more
heat is generated. Under certain conditions, the battery electrochemical reaction could be
endothermic, as shown in Table 2 for lithium-ion batteries at a C/1 discharge rate at 50°C.

1.10 LITHIUM-BASED BATTERIES: ADVANTAGES AND CHALLENGES

A key advantage of lithium-based batteries is the high cell voltage, the direct result of the
highly negative potential of lithium. With currently used mixed-oxide positives, the lithium-ion
cell operating voltage range is approximately 2.75–4.2 V. The nominal (average) discharge
voltage is about 3.6 V, and most of the usable cell capacity is delivered between 4.0 and 3.5 V.
With iron phosphate positives, the nominal cell voltage is about 3.4 V. The high cell voltage is
the fundamental reason for the high specific energy of lithium-ion cells and batteries. The high
cell voltage also results in a smaller number of cells for a battery of given voltage, for reduced
fabrication costs and increased reliability. A second basic advantage of the lithium-ion
electrochemistry is based on the small size of lithium, which permits reversible electrochemical
intercalation of lithium atoms into carbon-based negative electrodes with little structural stress
and strain. Similarly, the very small lithium ion is readily and reversibly incorporated into a
variety of host oxides that form the positive electrode. These characteristics are responsible for
maintaining the integrity of both electrodes during charge-discharge cycling, a key requirement
for long cycle life — especially in deep-discharge cycling. As discussed further below, key
technology advantages of lithium-ion batteries are high power density and energy efficiency as a
result of thin-cell construction and low self-discharge rate.
 16

The main challenges encountered in the development of lithium-ion technologies for

practical applications are also due to the highly negative potential of lithium. It is a powerful
driving force not only for the effectiveness of lithium as a negative electrode but also for its
chemical reactivity within the cell. Only the formation of an SEI prevents continued,
uncontrolled reaction of lithium with the electrolyte solvent and enables the controlled discharge
and recharge of lithium-ion cells and batteries. Once formed as a protective thin layer, the SEI
must be stabilized chemically and kept from growing thicker because of the associated
irreversible declines of cell capacity (through the loss of lithium) and of peak power (through
growth of cell resistance). Choosing proper electrolyte solvents and additives and keeping cell
temperatures below approximately 45–50°C are very important for stabilizing the SEI and
achieving practical calendar and cycle life.

Another key challenge is the sensitivity of lithium-ion cells to overcharge that can result
in chemical decomposition of positive electrode materials and the electrolyte and/or in the
deposition of metallic lithium at the negative electrode. These processes damage the cell and can
result in hazardous conditions, including gassing and release of flammable electrolyte solvent
vapors, if the cell safety seal is breached as a result of excessive gas pressure. To avoid
overcharge, lithium-ion batteries require accurate voltage control for every cell, unlike NiMH
and other aqueous electrolyte batteries that can tolerate significant amounts and rates of
overcharge. Accurate and reliable control of cell voltage and temperature is thus critical
requirements for achieving long life and adequate safety of lithium-ion batteries for all uses, but
especially so for automotive applications, which demand a very long battery life and high levels
of safety.
 17

2 LITHIUM-ION BATTERIES: STATE OF THE ART

2.1 PERFORMANCE AND LIFE

For more than a decade, prospective manufacturers have been developing lithium-ion
batteries for electric vehicles. A number of these efforts were terminated when the initiatives to
introduce electric vehicles were abandoned earlier in this decade. However, some programs
continued and resulted in the development of high- or medium-energy/medium-power lithium-
ion technologies. Although none of the programs have generated commercially available
batteries as yet, a few have resulted in the low-volume production of cells and in-vehicle
evaluation of prototype batteries. Key characteristics of these technologies are summarized in
Table 3.

Table 3 indicates that current designs of high-energy cells achieve energy and power
density levels of at least 150 Wh/kg and 650 W/kg. Batteries of 20–30 kWh using such cells can
attain energy densities of around 100 kWh/kg and power densities of 250–350 W/kg or above,
which is sufficient for small or even full-performance electric applications at acceptable battery
weights. Also, medium-power lithium-ion cells in the appropriate size range enable construction

TABLE 3 Status of Lithium-Ion High-Energy/Medium-Power Cell and Battery

Technologies

Manufacturer

Component JCS GAIA LitCEL Lamilion Kokam

Cell VL 45E/41M HE/HP Series EV Type EV Type HE/HP

Voltage (V) 3.6 3.6 3.85 3.6 3.7
Capacity (A•h) 45/41 60/45 50/33 13 100/40
Energy Density (Wh/kg) 150/136 150/105 136/142 ~150 163/135
Energy Density (Wh/L) 314/286 380/284 270 270 340/285
Peak Power Density (W/kg) 664/794 900/1,500 1,500 1,300 ~700/~1250
Power/Energy Ratio (L/h) 4.4/5.8 ~6/~14 7.7 8.7 ~4.3/~9
Cycle Life (Cyc. @% DOD) ~3,200 (80) ~1,000 (70) ~1,000 ~1,400 (100) ~3,000 (80)
Calendar Life (years at RT) ~12 – – ~10 ~10
Development Status LP LP LP LP LP

Battery (Applications) EV/PHEV EV/PHEV EV/PHEV Small EV EV/PHEV

Storage Capacity (kWh) ~24/15 22/8.1 20/7.6 9.2 ~30/~5
Energy Density (Wh/kg) 90/94 115/74 118/117 ~70 ~110/~100
Energy Density (Wh/L) 145/80 165/130 194 – –
Peak Power (kW) 55/87 50/80 155/60 62 130/47
Peak Power Density (W/kg) 210/540 ~250/730 912/917 ~400 ~490/~940
Power/Energy Ratio (1/h) 2.3/4.6~2.2/~10 7.7/7.8 6.7 ~4.3/~9.4
Weight (kg) 265/160 200/110 170/65 150 265/~50
Development Status LP;VE LP;VE LP; VE LP; VE LP
 18

of 7.5–15-kWh batteries with energy densities above 70 Wh/kg and power densities in the
500–900 W/kg range, values that can readily meet the performance requirements of PHEV
batteries.

Table 3 also includes data on cycle and calendar lives, which are two of the remaining
concerns about the readiness of lithium-ion batteries for vehicle applications. The more than
3,000 deep cycles achieved by Saft (a “world specialist in the design and manufacture of high-
tech batteries for industry”), and also claimed by Kokam, indicate that large lithium-ion cells
have the potential for very long cycle life. The calendar life of state-of-the-art, high-energy
lithium-ion technology is also much improved over the values of 2–4 years that were typical five
years ago.

Table 4 presents performance and life data for high-power/medium-energy lithium-ion

cell and battery technologies for HEV applications. This table shows a promising lithium-ion
high-power technology in a smaller cell size that has been commercialized by A123Systems for
power tool applications. The basic technology is expected to be developed into larger cell sizes
of higher power density for HEVs, an application for which it is well suited because of the safety
advantages of iron phosphate-based positives.

TABLE 4 Status of Lithium-Ion High-Power/Medium-Energy Cell and Battery Technologies

Manufacturer

Component JCS Matsushita HitachiVE Kokam GAIA A123Systems

Cell VL7P Gen 2 UHP HP MI 26650 –

Voltage (V) 3.6 3.6 3.4 3.7 3.6 3.3
Capacity (A•h) 7 7 5.5 7.2 7.5 2.3
Energy Density (Wh/kg) 67 92 – 114 84 110
Power Density (W/kg) 1,800 3,400 – 2,600 1,500 1,950
Power/Energy Ratio (l/h) 27 37 – 23 18 20
Power Density (W/L) 3,525 – – 4,900 3,750 4,200
Cycle Life (shallow cycles) ~400k – ~750k – – ~240k
Cycle Life (cycles/DOD) – ~1,000 – ~3,000/80 1,000/60 7,000/100
Calendar Life (years@RT) ~20 – – ~10 – ~15
Development Status LP – – LP LP CP

Battery (Application) HEV HEV HEV HEV HEV PT

Storage Capacity (kWh) 2 3 1 2.6 2 –
Peak Power (kW) 50 90 47 52 25 2.1
Peak Power Dens. (W/kg) 1,110 2,100 1,900 1,850 – –
Power Density (W/L) 1,110 -- 2,100 – – 2,200
Energy Density (Wh/kg) 44 70 42 93 – –
Power/Energy Ratio (1/h) 25 30 45 20 12.5 –
Weight (kg) 45 43 22.5 28 – –
Development Status PP D PP LP – –
 19

Even smaller lithium-ion cells of the type used in consumer electronic products are being
used for developmental PHEVs and full performance battery electric vehicles (FPBEVs) in the
form of batteries that consist of several thousand cells connected in parallel and in series. This
approach takes advantage of lithium-ion cells that are available now, since they are being
produced in very large numbers and sold at competitive prices for laptop computers. However, it
raises questions regarding the reliability, safety, and ultimately achievable cost of “small-cell”
batteries.

The calendar life of high-power lithium-ion battery cells is expected to depend on

temperature much in the same way as high-energy cell designs, because several of the high-
power cell technologies use the same basic chemistry as larger cells and thus are subject to the
similar degradation processes.

Table 5 provides information on lithium-ion battery developers and on types of cathodes,

anodes, packaging, cell structures, and cell shapes used in battery developments.

As with high-energy lithium-ion technologies for battery-powered electric vehicles and

PHEV applications, a key technical issue is whether developers can meet the very high levels of
safety required for vehicles operated on public roads.

2.2 COST

The current cost of lithium-ion HEV batteries made with early pilot equipment is around
$2,000/kWh. If the current designs were brought to volume production, it is anticipated that the
cost would drop to approximately $1,000/kWh.

TABLE 5 Developers of Lithium-Ion Technology Cells for HEV Applications

Company Cathode Anode Packaging Structure Shape

Toyota NCA graphite metal spiral prismatic

Panasonic NMC blend metal spiral prismatic
JCS NCA graphite metal spiral cylindrical
Hitachi NMC/LMO hard carbon metal spiral cylindrical
NEC-Lamilin LMO/NCA hard carbon pouch stacked prismatic
Sanyo NMC/LMO blend metal spiral cylindrical
GS Yuasa LMO/NCA hard carbon metal spiral prismatic
A123 Systems LFPO graphite metal spiral cylindrical
LG Chem. LMO hard carbon pouch stacked prismatic
Samsung LMo/NMC graphite metal spiral cylindrical
SK Corp. LMO graphite pouch spiral prismatic
EnerDel LMO LTO pouch spiral prismatic
AltairNano NMC/LCO LTO pouch stacked prismatic
 20

The cost calculation procedure for a lithium-ion battery module using 10-A•h LiMn2O4
HEV cells is illustrated in the following discussion. The cell’s material cost is estimated at $9.93,
with the key cost drivers classified by order of importance as follows: (1) separator, (2)
electrolyte, (3) LiMn2O4, (4) graphite, and (5) copper foil — these five factors account for 75%
of the cell’s material cost.

Assuming that materials before yield losses represent 65% of the cost of goods
(considerably less than that for NiMH because of the lower yield and higher depreciation for
lithium-ion technology), and with a low gross margin of 30%, the calculated cost of a cell is
$606/kWh. Further, assuming that the cost of the module per kilowatt-hour is 1.5 times the cost
of the cell, and that the pack cost per kilowatt-hour is 1.43 times that of the module, we arrive at
a module cost of $1,011 and a pack cost of $1,444/kWh.

The following analysis of the “best-case” scenario is more uncertain than that for the
NiMH battery, because:

• The cathode material, LiMn2O4, is not yet in high-volume production.

• The separator and the electrolyte are the top two items driving the cost of
materials. In both cases, the high cost is a result of the difficulty of making
these high-purity (electrolyte) and high-dimensional-accuracy (separator)
materials, even though the cost of the underlying raw materials is quite
moderate.

• Yield is a significant item affecting cost in early years of production; the

allowable factor for the yield of materials is attributed as 65%, as compared
with 75% in the case of NiMH.

• The cost of electrical management for the module and pack is very high at
present. Although reductions in cost will occur, they are difficult to estimate at
this point. Under the “best-case” scenario, there will be significant reductions
in the cost of materials and in module and pack peripheral costs. Certain
advances in materials — possibly including new electrolyte salts, new cathode
material, and a less-expensive process to make the separator — may occur.
Such innovations, when fully developed and tested, could lower the price of
the battery. This may take 5 to 8 years.

In 1994, the cost of 18650 type (rated at 1,100-mA•h) cylindrical consumer lithium-ion
cells was over $10 per cell at a high volume. In 2001, the capacity of the cell increased to
1,900-mA•h, and the cost dropped to around $2.00 per cell at the comparable volume, resulting
in a drop in cost of $3/Wh for a comparable 1,100-mA•h cell. This is a remarkable improvement
in less than seven years. The recent price of this cell — now made in quantities of over
100 million per year — is about $300/kWh. The HEV cell, with its ultra-thin electrodes, uses
approximately twice the amount of separator and electrolyte per watt-hour as the consumer cell;
this has a significant impact on the cost of materials and manufacturing, which is determined to a
large extent by the design of the electrodes.
 21

2.3 LITHIUM-ION BATTERY SAFETY

Battery safety is critical for the success of lithium-ion batteries for HEV, PHEV, and EV
applications. Lithium-ion battery safety is tied directly to the avoidance or strict control of those
processes in lithium-ion battery cells that, if uncontrolled, can release dangerous amounts of
energy, flammable gases, and/or toxic chemicals into the battery environment. These processes
include (1) electrochemical overcharging of battery cells and the ensuing reactions of the
chemical species formed during overcharge and (2) chemical reactions of the organic
electrolyte/solvent with one or both electrodes. Under normal operating conditions of cell
voltage and temperature, these processes are either precluded through cell-level voltage control
(overcharge) or occur at very low rates that do not constitute safety risks.

Concerns about lithium-ion battery safety thus can be limited to the response of cells and
batteries to “abuse,” including electrical/electrochemical (shorting, high rate, and extensive
overcharging), thermal (heating to temperatures above the cell tolerance limit), and/or
mechanical (destruction of physical integrity). Abuse tolerance testing has become part of cell
development, as well as battery design and engineering efforts. The degree of tolerance to
various abuses is serving as a relative measure of safety and as a guide to the development of
adequately safe lithium-ion cells and batteries. The procedures most commonly used in lithium-
ion abuse testing were developed with DOE funding under the USABC and FreedomCAR
programs and are now widely accepted. Results of systematic abuse testing of small commercial
lithium-ion cells following these procedures show that sustained high-rate/high-voltage
overcharge and massive shorting of some lithium-ion cell types can cause thermal runaway that
is accompanied by cell-internal gas evolution, cell venting, and (if triggered by sparks) burning
of vented electrolyte solvent. However, these conditions can be created only if the standard,
multiple levels of protection devices (e.g., voltage-sensitive and pressure-driven switches to
interrupt current; current-sensitive and temperature-activated fuses; and cell-balancing
electronics) are removed.

Although the chemistries of the cells and batteries used in EV and HEV battery
technology are similar to the chemistries used in lithium-ion laptop batteries, the cell and battery
designs are substantially different. Even more important, batteries for HEV, PHEV, and battery-
powered electric vehicle applications have voltage, pressure, and temperature sensors integrated
in multiple, independent controls that prevent or terminate unsafe battery conditions of the type
that have resulted in some laptop battery fires.

Experience with more than 200 electric and hybrid vehicles equipped with lithium-ion
batteries designed for FPBEVs or HEVs and road tested in California, Europe, and Japan over
the past five years validates the high level of safety achieved for current lithium-ion technology.
No significant safety issues were encountered during these tests.

While lithium-ion technology representing the state of the art of several years ago has
proven safe in on-road vehicle testing, R&D is continuing to further enhance battery life and
safety, as part of extensive worldwide efforts to advance all aspects of lithium-ion cell and
battery technology. Challenges for developing lithium-ion battery technology are costs at initial
production volumes, safety, life, and manufacturing reliability.
 22

2.4 LITHIUM-ION BATTERY INDUSTRY IN CHINA

The PRC is the country with the largest population in the world. The PRC has been
involved in battery technology developments and manufacturing for several years. The PRC
exported the largest number of batteries for telecommunication, computers, cell phones, and
other electronic equipment to many countries over the last 10 years. Several hundred companies,
both small and large, are involved in development of lead-acid, NiMH, and lithium-ion batteries
for these applications. In the past 3 to 4 years, many outside companies have been bringing
advanced battery technologies to the PRC and setting up partnerships and/or joint ventures to
manufacture batteries for these and other applications (such as electric bikes, EVs, and HEVs) to
take advantage of low labor costs in China and incentives provided by the Chinese government.
Companies in the PRC are aggressively working toward development of manufacturing
processes for the battery export market.

In 2003, the annual mobile phone production capability of the Chinese

telecommunication equipment manufacturing industry reached 200 million sets, with an actual
annual output of 186 million sets, among which about 120 million sets were exported — that
accounts for a quarter of the total global output of mobile phones. Driven by the mobile phone
market, the telecommunication equipment manufacturing industry improved its share of the
export market. In 2003, Chinese companies produced 334 million batteries just for mobile
phones.

Taking advantage of small early markets for lithium-ion battery technology, Chinese
companies were involved in developing a large number of advanced batteries in collaboration
with foreign companies. Now those companies are developing lithium-ion batteries for electric
bikes, EVs, HEVs, and PHEVs. From 2001 to 2004, the number of battery companies in China
increased from 455 to 613; accordingly, the number of employees also increased from 140,000 in
2001 to 250,000 in 2004. The total output reached 63.416 billion Yuan ($8.1 billion) in 2004,
which is an increase of 52.58% over 2001.

The sales of batteries produced by large-scale companies in the battery industry were
59.82 billion Yuan ($7.65 billion) in 2004, which was an increase of 53% compared with sales in
2003; an increase of 105% compared with sales in 2002; and an increase of 161% compared with
sales in 2001. This growth is attributed to the growth of large companies. In the last four years,
the debt-to-asset ratio of China’s battery industry has been fluctuating between 54 and 59%.

2.5 INTERNATIONAL STANDARDS FOR THE BATTERY INDUSTRY

The International Electrical Commission (IEC) standards are the most commonly used
standards by the battery industry for testing and evaluating battery technologies. The standard for
testing nickel-cadmium battery is IEC 60285; the standard for testing nickel metal hydride is
IEC61436. For the evaluation of lithium-ion batteries, the most commonly used standards are
those developed by SANYO or Panasonic. Some companies use IEC standard 61960 to test and
evaluate lithium-ion batteries. Also, the IEEE1625 standard is used to determine the
 23

improvements in the reliability of lithium-ion batteries. This standard includes the appearance of
portable computers, vibrations, environment protection of the battery unit, and assembly.

2.6 INTERNATIONAL MARKET COMPETITION

Along with development of the electronic product market for mobile phones, notebook
computers, digital cameras, and portable video cameras, the lithium-ion battery industry is also
growing substantially. In 2003, the global output of lithium-ion batteries surpassed 1.3 billion
units, with a growth rate of over 60%, while total sales were more than $4 billion. In 2005, the
global output of lithium-ion batteries grew again by 48%.

During 2000–2003, the lithium-ion battery industry in China grew rapidly, at an annual
rate of over 140%. At present, the lithium-ion battery market in China is 32 million units per
month, which is 29% of the global market share. In 2003, the global top 10 manufacturers of
lithium-ion batteries held 81% of the global market share. Four Chinese manufacturers are listed
in the top 10: BYD Company Limited; Shenzhen BAK Battery Co., Ltd.; Shenzhen B&K
Technology Co., Ltd.; and Tianjin Lishen Battery Joint-Stock Co., Ltd. In the future, along with
the expansion in production of BYD Company Limited; Shenzhen BAK Battery Co., Ltd.;
Shenzhen B&K Technology Co., Ltd.; and Tianjin Lishen Battery Joint-Stock Co., Ltd., the
lithium-ion battery industry in China is expected to grow at an annual average rate of more than
30%.

The Korean lithium-ion rechargeable battery industry is keeping pace with the growth of
the electronics industry. In 2005, the global market share for Samsung SDI and Samsung LG
Chemistry companies’ lithium-ion batteries reached 28%. By 2010, China will reportedly
surpass Korea in the growth of the lithium-ion battery industry because the cost of the battery is
lower than that in Korea or Japan, according to the officials at the Ministry of Science and
Technology (MOST). Therefore, the future of the lithium-ion battery industry in China depends
on a breakthrough in quality and performance.

The polymer lithium-ion (PLI) battery has become the leader in the Chinese battery
industry, since it performs better and has a higher power density than the conventional lithium-
ion battery — plus, it is also lighter and thinner. Although the price of the PLI battery is 10–30%
higher than the price of the lithium-ion battery, since 1999 the rate at which the market for PLI
batteries is growing is still faster than the rate at which the market for lithium-ion batteries is
growing. Compared with 1999, the market share of PLI batteries increased by 8% in 2003 and by
10% in 2004. The market share of PLI batteries is increasing in China, Japan, and Korea, a trend
similar to the market for lithium-ion batteries. Because of increasing market demand and
expansion plans to produce PLI batteries in China, Japan, and Korea, the market share of
PLI batteries will continue to increase annually.

Lithium-ion batteries are widely used in various electronic products, such as handsets,
laptops, Personal Digital Assistants (PDAs), and digital video. Some electric vehicles also use
lithium-ion batteries. In Japan, 57.4% of lithium-ion batteries are used in mobile phones, 31.5%
in notebooks, 7.4% in digital videos, and 3.7% in other products. In China, most lithium-ion
 24

batteries are used in handsets and cell phones, because laptops and digital videos have not been
popularized yet. Lithium-ion batteries have become the mainstream batteries for the laptop and
mobile markets.

In China, such manufacturers as BYD Company Limited; Shenzhen BAK Battery Co.,
Ltd.; Shenzhen B&K Technology Co., Ltd.; and TCL Corporation (and others) hold large shares
of the global lithium-ion battery market. However, the capacity and quality of lithium-ion
batteries need to be improved. The obstacles to improving lithium-ion battery performance
include cathode development, cost, development of a functional additive, and patent protection.

2.7 GROWTH OF LITHIUM-ION BATTERY TECHNOLOGY IN CHINA

In 2003 and 2004, the lithium-ion battery industry in China was booming, and during that
time, many companies established new production lines. In 2004, China had about 60
manufacturers of lithium-ion batteries. Market competition has been intense; the total market
share of the top 10 manufacturers in 2003–2004 was about 85%, indicating that enterprises find
it difficult to compete with large manufacturers.

Along with the rapid growth in the number of lithium-ion battery manufacturers in China,
companies like BYD Company Limited; Tianjin Lishen Battery Joint-Stock Co., Ltd.; Shenzhen
BAK Battery Co., Ltd.; and Shenzhen B&K Technology Co., Ltd., are also increasing their
market share. In 2004, the domestic and overseas markets for lithium-ion batteries were
flourishing, the export volume was 189 million units, and sales increased by 16.3%. Because of
the rapid increase in domestic demand and the import of 550 million units of lithium-ion
batteries, sales increased by 23.4% in 2004. In the future, along with the expanded production by
some key enterprises and the continuous growth of portable products such as mobile phones and
notebook computers, China’s lithium-ion battery industry could still maintain the annual average
growth rate of more than 30%.

2.8 KEY RAW MATERIAL

The rapid growth of the lithium-ion battery industry in China drives the growth of the key
raw material industry for lithium-ion batteries. Before 2001, the raw materials for lithium-ion
batteries were mainly imported. However, domestic sources now supply separator material,
anode material, electrolyte, and cathode material for lithium-ion batteries. At the end of 2003,
Gejiu City in Yunnan Province established production lines for lithium cobalt, with an annual
production capability of 800 tons. In 2004, the Chinese Academy of Geological Sciences
developed a new technique for extracting lithium from salt lakes and established a
demonstration-engineering project for a source of salt lake lithium in Baiyin City in Gansu
Province. So far, the Chinese Academy of Geological Sciences has produced 600 tons of lithium
carbonate. In 2004, key manufacturing equipment for LiNiO was developed to mass-produce it
at a production capability of 500 tons per year. China has abundant nickel resources; therefore,
establishing LiNiO production lines will alleviate the import situation. Chinese companies will
 25

not have to depend on importing anode material for lithium-ion batteries. In early 2004, the
production of carbon material for lithium-ion battery anodes surpassed 1,000 tons.

At present, China has a relatively well-developed lithium-ion battery manufacturer base.

Manufacturers such as BYD Company Limited; Shenzhen BAK Battery Co., Ltd.; and Shenzhen
B&K Technology Co., Ltd., enjoy a large share of the global battery market. During 2003–2004,
the Chinese lithium-ion battery industry developed dramatically. The production of cobalt acid
lithium and nickel acid lithium, as well as the invention of a new manufacturing technique to
extract lithium from salty lakes, could drastically reduce the importation of anode materials for
lithium-ion batteries.
 26

3 LITHIUM-ION BATTERY TECHNOLOGY IN CHINA

The demand for lithium-ion rechargeable batteries has been driven by the rapid growth in
the use of electronic portable equipment, such as cellular phones, laptops, and digital cameras. In
addition, the expectation that rechargeable batteries will play a large role in alternative energy
technology, as well as in electric bikes (e-bikes), EVs, hybrid vehicles, and PHEVs, has made the
development of lithium-ion rechargeable batteries a fast-growing industry in China and the
world. The first commercial lithium-ion rechargeable battery, introduced by Sony Japan in 1989,
used graphite as the anode. Since then, Chinese companies have been developing and producing
lithium-ion batteries for portable applications. Recently, Chinese companies that manufacture
lithium-ion batteries grew by several hundred. Large companies (such as BYD Company
Limited; Shenzhen BAK Battery Co., Ltd.; Shenzhen B&K Technology Co., Ltd.; Tianjin Lishen
Battery Joint-Stock Co., Ltd.; and others) hold a large share of the global market. The
performance characteristics of lithium-ion cells from various manufacturers are given in Table 6.

TABLE 6 Characteristics of Lithium-Ion Cell/Module from Various Manufacturers

Specific Power
Cell/ Voltage Capacity Weight Energy Density Cycle
Manufacturer Module (V) (A•h) (kg) (Wh/kg) (W/kg) Life Application

CITIC Guoan MGL M 24 13 2.3 92 151 500 Bike

M 3.8 10 0.10 8 – 500 Phone
M 3.8 5 0.5 76 125 500+ Miner lamp
M 48 100 3.2 120 134 450 EV

Beijing Green Power C 3.8 10 0.110 118 84 540 Bike

Tianjin Lishen C 3.6 5.4 0.205 128 92 600 Notebook

Battery Joint-Stock
Co., Ltd.
C 3.6 13 0.360 117 91 500 Bike
C 3.6 8 0.245 121 94 500 Bike

Tianjin Lantian C 3.6 2 0.044 – – – Comm

C 3.6 18 0.80 115 100 800 EV/bike
C 3.6 100 2.6 106 138 460 EV/bike
C 3.6 3 0.125 87 147 450 Power tools and
HEV
M 24 20 10.0 52 53 400 EV/motor bike

Xingheng M – 15 0.88 63 1,250 450 HEV/EV

M – 7.5 0.44 68 1,800 450 HEV
M – 10 0.37 100 200 500 EV
 27

TABLE 6 (Cont.)

Specific Power
Cell/ Voltage Capacity Weight Energy Density Cycle
Manufacturer Module (V) (A•h) (kg) (Wh/kg) (W/Kg) Life Application

Suzhou Phylion C 3.7 10 0.36 102 86 500 E-bike

Battery Co., Ltd.

Shenzhen BAK C 3.7 1.8 0.054 123 100 – Portable

Battery Co., Ltd.
C 3.7 0.95 0.028 125 99 400+ Portable

ABT, Inc. C 3.7 5 0.270 69 76 >700 Portable

GBP Battery Co. C 3.7 60 1.80 123 82 >550 EV

Hyper Power Co. C 3.7 1.15 0.037 115 78 >600 Portable

Shenzhen B&K C 3.8 0.100 0.007 100 – 400 Portable

Technology Co., Ltd.

Tianjin Blue Sky C 3.7 60 1.8 122 80 >500 EV/bike

BYD Company, Ltd. C 3.7 1.8 0.046 144 98 >400 E-bike

EMB Battery Co. C 3.7 2.1 0.045 172 88 300 E-Bike

The capacity of lithium-ion cathode materials needs to be improved. Obstacles to

improving electrolyte include cost and functional additives, as well as foreign patent protection.

Lithium-ion batteries, whether for EVs, e-bikes, or consumer electronics, are all produced
by using similar processes, described in depth in Gaines and Cuenca (2000). Hence, a single
manufacturer can produce battery sizes for a wide range of applications, from portable consumer
electronics to EVs. Lithium-ion batteries can be designed for high power or high energy,
depending on cell size, thickness of the electrode, and relative quantities of the material used.
High-power cells are generally smaller in order to dissipate the higher heat load. Both types use
the same current collectors and separators. Lithium resources are abundant in China. As of 2000,
China was the second largest producer of lithium in the world and, in 2004, it produced
18,000 metric tons.

Most Chinese companies producing lithium-ion batteries do so for portable applications.

Large companies have undertaken research and development with the help of joint ventures
and/or partnerships with companies from Japan, Europe, and the United States. Section 3.4
provides summaries of joint ventures and partnerships. These companies, which include
BYD Company Limited; EMB; GBP; Suzhou Phylion Battery Co., Ltd.; Xingheng; Tianjin
Lantian; Tianjin Lishen Battery Joint-Stock Co., Ltd.; Beijing Green Power; and CITIC Guoan
 28

MGL, are developing lithium-ion batteries for e-bike, EV, and HEV applications — with
particular focus on EVs and e-bikes.

E-bikes have been by far the most successful battery electric vehicle application in
history, with an estimated cumulative production of ~30 million by 2007. At the heart of e-bike
technology is the rechargeable battery. The core rechargeable battery technology used in e-bikes
is VRLA, or “sealed lead-acid,” and lithium-ion batteries.

Lithium-ion battery packs for e-bikes range from 24 to 37 V and have capacities of
5–60 A•h. The market for lithium-ion e-bikes in China is still small. In Japan and Europe,
however, lithium-ion and NiMH are the dominant battery types, although annual e-bike sales
(200,000/yr and 100,000/yr, respectively) are significantly lower than those in China.

In terms of traction battery technology, great achievements have been made in NiMH and
lithium-ion/lithium-polymer battery technology. Research teams are:

• Beijing Powertronics Battery Co., Ltd. (lead-acid batteries)

• Tianjin Peace Bay Co., Ltd.
• Inner Mongolia Rare Earth Ovonic High-Power Ni/MH Battery Co., Ltd.
• Shenzhou Science
• Chunlan (NiMH battery technology)
• Zhong Hengrun
• Tianjin Lantian Double-cycle Tech Co., Ltd.
• Phylion Battery Co., Ltd.
• Beijing Green Power Technology Co., Ltd.
• MGL
• Thunder-sky (lithium battery technology)

3.1 PROCESS TO IDENTIFY COMPANIES IN CHINA DEVELOPING

LITHIUM-ION BATTERY TECHNOLOGY

Initially, 32 web sites were identified as related to battery companies in China. These
sites did not include company-specific sites. These sites were studied in detail to identify
individual sites for battery companies, including those that mentioned such battery technologies
as lead-acid, nickel-metal hydride, lithium-polymer, and lithium-ion. Approximately 260
company-specific sites were identified, and they included companies related to export, sales,
research and development, and manufacturing battery technologies.

These 260 sites were studied in detail, and a hierarchy of battery technology criteria was
established, as shown in Figure 1. For screening these companies initially, a set of “Selection
Criteria” was set up to narrow down the list to companies involved in developing lithium-ion
battery technology:

1. Sales
2. Research
 29

3. Development
4. Manufacturing
5. Exporting
6. Size
7. Technology availability

On the basis of these criteria, 43 companies (see Appendix D, List A) were identified that
are in business to pursue lithium-ion battery technology for various applications. These
applications predominantly include camcorders, telephones, and a variety of electronic gadgets.
Interest in technology development for transportation applications is strong and quite evident,
particularly at large companies, universities, and institutions.

The number of appropriate companies was subsequently narrowed down to 27 (by using
the criteria II shown in Figure 1) by eliminating sales companies (see Appendix D, List B). Five
large institutions are also involved in the development of lithium-ion battery technologies.

Battery Industry in China

Selection Criteria I
•PbA
•NiFe •Sales
•NiMH 2
•Research
•Lithium/P
•Lithium Ion •Development Selection Criteria II

•Manufacturing •Research
•Export Companies •Development Selection Criteria III

•Manufacturing •Research
•Institutions •Development
•Company Size •Export Companies
•Institutions •Manufacturing
•Technology Availability •Institutions
•Company Size
•Technology Availability •Technology Availability

LIST A LIST B LIST C

FIGURE 1 Process Used to Identify Companies in China Involved with Lithium-Ion Batteries
 30

In the next step, the exporting companies were eliminated. These companies do not
develop any products; they simply buy products from other companies and export them. Also,
extensive discussions were held with representatives from the China Automotive Technology
and Research Center (CATARC) to narrow down of the final list of companies, institutions, and
universities for the detailed analysis and evaluations. These organizations focus their work on
lithium-ion technology and are shown in Appendix D, List C.

Section 3.2 provides details on lithium-ion battery technologies at several companies and
institutions that were visited.

3.2 TECHNOLOGY AT VARIOUS INSTITUTIONS IN CHINA

3.2.1 Tsinghua University

(Department of Automotive Engineering
Beijing, 100084)

The university’s Automotive Department started its research activities for EVs in 1995,
for hybrids in 1998, and for fuel cell hybrid vehicles in 1999. The university is working with the
following battery companies on lithium-ion batteries for vehicular applications:

• Shenzhen B&K Technology Co., Ltd.

• Thunder Sky
• MGL New Energy Technology Co., Ltd.
• Oriental Polymer
• Huanyu Battery Co.

The department has an excellent facility to test and evaluate complete vehicular systems,
as well as batteries at the module and pack level. Battery testing and evaluations are conducted
by using the following:

• National Standards of the PRC

• USABC Battery Test Manual
• Partnership for a New Generation of Vehicles Battery Test Manual
• FreedomCAR Battery Test Manual
• Testing Standards of Japan
• Other testing standards, such as those developed by American Society of
Mechanical Engineers (ASME)

Currently, it is evaluating hybrid and fuel cell hybrid buses with lithium-ion batteries.
Batteries are 100 A•h, and a pack contains 30 cells. This evaluation is conducted for China’s
863 Program. Oriental Polymer Company in Beijing is supplying an 18-kW fuel cell. Thunder
Sky battery Company has provided a 30 A•h lithium-ion cell with 100 cells per pack in series.
 31

A hybrid bus has been evaluated for 1,250 km without any degradation in battery
performance. Similarly, a fuel cell hybrid bus has been evaluated for 2,340 km without any
degradation in performance.

Other research includes:

• EV Structure Design
• Parameter Match and Optimization of EV Powertrain System
• Optimization of Energy Management Strategy
• EV Controller Design
• EV Communication Network
• EV Failure Diagnostics
• Other EV Subsystem Testing
• EV Assembly and Road Test

The department’s focus is research on EVs, HEVs, PHEVs, and fuel cell electric vehicles
(FCEVs), with an emphasis on battery applications. Involved in this research are 2 professors,
4 associate professors, 2 engineers, 5 part-time experts, 4 post-doctoral students, 4 doctoral
candidates, and 13 master’s degree students. The university has six patents and four applications
pending in China on battery thermal management, EV controller design, and electronics for
vehicles. The department is working with General Motors on fuel cell vehicles; however, the
details of the involvement are unclear.

3.2.2 China Electrotechnical Society

(46 Sanlihe Road
Beijing 100823)

The China Electrotechnical Society has 123,000 members. The society is a clearinghouse
for electrotechnical research. It conducts studies on battery technology markets for EVs and
HEVs. Recently, the society completed a preliminary technology study on fuel cells and fuel cell
hybrid vehicles. The study was conducted for its membership and the Chinese government. The
society would not provide a copy of the report.

The Chinese government encourages the development of lithium-ion battery technology

for vehicular applications. The Chinese government is providing incentives and grants for
Chinese-owned and -operated companies — as much as 75% of the total cost, which covers most
operating and capital expenses. For small companies, these incentives can be upwards of 85%.

China wants to export not only lithium-ion batteries for electronics applications, but it
also wants to export batteries and advanced vehicles. Currently, China has 18 million battery-
operated bicycles, of which 40,000 operate on lithium-ion batteries, and the rest on lead-acid
batteries.
 32

3.2.3 CITIC Guoan MGL

MGL New Energy Technology Co., Ltd.
(Beijing 102200)

MGL is located in Beijing Zhongguancun Science Park. It is engaged in the R&D and
production of new composite metal oxide materials and high-energy-density lithium-ion
secondary batteries. MGL is primarily supported financially by the CITIC Guoan Group, a
wholly owned subsidiary of China CITIC Group. The CITIC Guoan Group is involved in such
industries as information, new materials, comprehensive mineral resources exploration, tourism,
and real estate. CITIC was founded in October 1979 by Rong Yiren, former Vice Chairman of
the Peoples Republic of China. Through more than 20 years of development, CITIC has built a
large-scale international enterprise group with total assets of 700 billion Ren Min Bi (RMB)
($933.34 million).

MGL ranks as China’s largest manufacturer of the lithium-ion battery cathode material,
LiCoO2, and it will be the first to market the new cathode materials, LiMn2O4 and
LiCoO0.2Ni0.8O2. MGL states that it emphasizes quality control, and has passed the certification
of both New and Hi-Tech Enterprise Standards and IS09001:2000. With its particular synthesis
method, MGL appears to efficiently produce cathode materials of superior performance and
reliability in an environmentally friendly way. Since incorporation, MGL holds the monopoly in
China’s lithium-ion battery cathode materials market and now appears to be at the forefront of
the industry. Besides cathode materials, MGL also produces lithium-ion secondary batteries of
high energy density and high capacity for power and energy storage — the capacity ranges from
several ampere-hours to several hundred ampere-hours. As China’s first power-battery
manufacturer, MGL appears to lead the industry in the marketing of high-capacity lithium-ion
secondary batteries, used in the Beijing Municipality’s trial electric bus fleet.

The MGL R&D center is located in Beijing. MGL has 850 employees, including 103
Ph.D. engineers and scientists. The R&D center encompasses 5,000 m2 and includes advanced
battery analytical, manufacturing, testing, and assessing equipment.

Major products of MGL’s materials division include LiCoO2 (2,300 tons/year), LiMn2O4
(1,450 tons/yr), and LiCo0.2Ni0.8O2 (340 tons/yr). These oxide materials are indispensable to
high-voltage (4-V) and high-energy-density lithium-ion secondary batteries. Over the past
10 years, lithium-ion secondary batteries have taken the place of NiMH and NiCd secondary
batteries, which are used widely in mobile phones, laptops, and other electronic applications.

Instead of the commonly used solid-state synthesis method, MGL has adopted a unique
method to synthesize materials, which is an efficient and simple process featuring zero emissions
and low energy consumption. Feedback from lithium-ion battery manufacturers in China and
abroad indicates that MGL’s battery cathode materials have excellent and steady electrochemical
performance. However, despite the rapid development of lithium-ion batteries over the last
10 years, limited cobalt resources and the poor thermal stability of LiCoO2 limit the application
of lithium-ion batteries.
 33

For the past 10 years, with the support of the State and local governments, MGL has been
focusing on the research and development of new lithium-ion battery cathode materials, notably
spinel LiMn2O4 and layered LiCo0.2Ni0.8O2. Experiments indicate that the superior thermal
stability and steady charge-discharge performance of LiMn2O4 and LiCo0.2Ni0.8O2 are quite
compatible with various types of lithium-ion batteries. Recently, MGL’s LiMn2O4-based and
LiCo0.2Ni0.8O2-based lithium-ion batteries have been used in energy-saving and
environmentally friendly industries. China is poor in cobalt resources, but rich in manganese and
nickel resources. MGL is developing China’s lithium-ion battery materials industry by applying
its specific synthesis method.

In comparison with NiMH and NiCd secondary batteries, lithium-ion secondary batteries
have higher cell voltage, are smaller and lightweight, offer more flexibility under different
temperatures, and do not have memory effects. Reportedly, these batteries do not emit pollution.
At present, lithium-ion secondary batteries have an energy density of two to three times that of
lead-acid batteries and around twice that of NiMH and NiCd batteries. Small lithium-ion
batteries have been widely used in small high-end electronic devices (such as mobile phones and
laptops). The physical-chemical properties of cathode materials, separators, and electrolytes play
an important role in the reliability of lithium-ion batteries, and carbon — as the current anode
material — has realized only one-tenth of its theoretical capacity. The new organic, inorganic,
and metallic materials that MGL is developing will improve the physical-chemical performance
of lithium-ion batteries and expand their applications, and solid and inorganic electrolytes will
drastically improve the reliability and safety of lithium-ion batteries.

Recently, MGL’s independently developed high-capacity lithium-ion batteries have been

used successfully in Beijing’s trial fleet of electric buses. Research indicates that the new
lithium-ion batteries could accelerate the industrialization of EVs, and show potential in such
applications as mobile communications, nighttime power storage, wind- and solar-power storage,
backup emergency power, backup power for vehicles, and portable power.

3.2.3.1 Attributes of MGL’s Lithium-Ion Battery

• Safe, excellent cycle performance and economics: the cathode material of

MGL’s power battery is spinel LiMn2O4, produced by MGL’s unique
synthesis method, which is yielding a far more economical and thermally
stable product than LiCoO2.

• Flexible configuration with aluminum packaging and stainless-steel casing.

• Stable output under large charge/discharge currents and different temperatures

(-25~50°C).

• High voltage (3.8 V) and high energy density (>120 Wh/kg).

• No memory effects and non-polluting.

 34

3.2.3.2 100-A•h LiMn2O4-Based Battery for EVs

• Constant current charge capacity (96%)

• Lower impedance (<0.85 mΩ)
• Flexible configuration
• Prominent safety performance
• High specific energy (>120 Wh/kg)
• Easily connected in series or parallel

3.2.3.3 Lithium-Ion Battery for Miner’s Lamp

• High safety performance

• Lightweight, high specific energy
• Flexible capacity (4, 5, and 6 A•h)
• Long cycle life

In addition, MGL’s LP 188270 series battery has passed the safety test by North
Automotive Quality Supervision Test and Assessment Research Institute 863 (this is a National
Advanced Technologies Development Program in China) Power Battery Testing Base under the
standard GBIZ 18333.1-200 and GB/T 18827-2000. The testing results show that MGL batteries
have superior safety performance, making the lithium-ion battery the ideal power source for a
miner’s lamp. Some manufacturers of miner’s lamps in China have used MGL’s batteries.

3.2.3.4 Battery-Management System for HEVs

• Measurement of current, voltage (cell and total), and temperature

• Calculation and display of SOC and state of health
• Cell balancing
• First protection (battery-management system): over-voltage (cell, pack),
current, temperature
• Communication: CAN (ECU), RS-422 (internal), RS-232 (monitoring PC)
• Pre-charge control
• Second protection: over-voltage (cell), short current protection by heat sink
(ratio of the porous sink height to the jet nozzle width).

3.2.3.5 MGL Battery-Powered Electric Vehicles

• MGL participated in the Challenge Bibendum 2004 held in Shanghai, China,

and the Challenge Bibendum 2006 in Paris, France. At both events, MGL
featured its independently converted pure EV powered by an MGL lithium-
ion power battery. MGL received awards on both occasions for parameters
such as acceleration, noise, fuel efficiency, radiation, and emissions.
 35

• MGL’s vehicles have passed the comprehensive EV performance tests

performed by the Road Transportation Testing Center of the Road Science
Research Institute of China’s Ministry of Transportation.

• Beijing’s Olympics electric bus, powered by an MGL 100-A•h power battery,

has covered an cumulative range of 20,000 km during the past two years, and
the tests have demonstrated high electrochemical and safety performance of
its battery.

3.2.3.6 Lithium-Ion Power Battery Packs for Electric Two-Wheelers

• 24 V with 13-A•h aluminum packaged, weight 2.3 kg

• 24 V with 8-A•h stainless-steel packaged, weight 2.45 kg

3.2.3.7 Other Information on MGL

• MGL holds several patents (perhaps between 15 and 25) on cathode materials,
anode materials, a battery management system, electronics, and other areas of
battery technology in the United States, Japan, China, and Korea.

• The cost of the lithium-ion technology at the cell level is

5–9 RMB/Wh ($0.67–1.20/Wh).

• MGL is working with a U.S. company on a battery for electric and hybrid
vehicle applications. However, MGL did not provide the name.

• MGL is receiving grants from local, district, and national government — the
total amount is around 10 million RMB ($1.34 million) per year.

• MGL is willing to provide cells, modules, and packs for benchmarking in the
United States.

3.2.4 Beijing Green Power Technology Co., Ltd.

(Beijing 100086)

Beijing Green Power Technology Co., Ltd., has set up research laboratories, as well as
applied laboratories for technology scale-up. In the research laboratory, the company conducts
research on the materials for cathodes, anodes, and separators. In applied materials, the
laboratory conducts research on cells and module development and performs testing and
evaluation.

After three years, Green Power has formed its own technical research direction on the
aspects of lithium-ion power cell technology and cathode material with technological success.
 36

Green Power has invested 20 million RMB ($2.67 million) to set up a product line of power cell
capacity of about 20,000 A•h per day. Green Power has invested 10 million RMB
($1.34 million) to set up a product line of spherical lithium cobalt oxide cells with a capacity of
300 tons per year. Additionally, 15 million RMB ($2.00 million) was invested in setting up a
product line of three-element cathode material with 300 tons per year, which was put into
production in July 2006. The production capacity is 10,000 A•h per day.

3.2.4.1 Lithium-Ion Battery Technology

Electric Bike: Green Power uses its specific technology to fabricate cell structures, along
with a new cathode material (LiNi1/3Co1/3Mn1/3O2) and a new electrolyte (LiBOB), for its high-
power cells and modules. The company has developed a 10-A•h cell for e-bike application. The
cost of this cell is estimated at 135 RMB ($18.00) (this is only the cell cost). The e-bike battery
pack has 10 cells (10 A•h each), and so far the company has sold 540 e-bikes with this battery
and accumulated 30,000 km of on-the-road performance without battery degradation.

Electric Bus: A 100-A•h cell has been designed for the electric bus application. In the
electric bus, the battery pack has 500 cells with 100-A•h capacity for each cell. This bus is being
evaluated on the road and has accumulated 20,000 km; battery capacity is at 98% of the original
capacity. A battery pack has 400 V and provides 50 A•h of capacity. Total energy is greater than
200 kWh. The pack is designed to operate at -20°C to +55°C. Green Power is working on a
cooperative program with Beijing Science and Engineering University, which is evaluating
electric buses for the 2008 Olympics. Green Power has built five buses so far. A thermal
management system used in this bus maintains a temperature with a differential between 1 and
3°C. The cost of a 100-A•h cell is estimated at 1,700 RMB ($226.67). There are additional costs
for making a battery pack. Green Power will not elaborate on how much cost is added to the cell
cost.

Hybrid Electric Bus: For the HEV bus application, Green Power is using 100 cells, each
with a capacity of 100 A•h. Each cell weighs 3.0 kg. Pack voltage is 360 V, and the power is
54 kW (with energy around 34 kWh). A hybrid bus that is similar to a U.S. 40-ft version has
accumulated 10,000 km with very little degradation in performance. Green Power is cooperating
with Tsinghua University on this program. According to Tsinghua University, Green Power’s
battery design and performance are comparable with those of other lithium-ion batteries
evaluated by the university. Green Power has built six HEV buses so far.

3.2.4.2 Other Information on Green Power

• Green Power has 10 patents in China on cathode and anode materials, battery
management systems, electronics, and other areas of battery technology. It is
currently marketing in China; however, Green Power wants to expand its
market abroad in the near future.
 37

• Green Power is obtaining 10 million RMB ($1.34 million) per year in grants
from the Chinese 863 Program, which is an advanced technology program.*

• Green Power has a strong desire to work with a company in the United States.

• Green Power is very interested in providing cells, modules, and packs for
benchmarking in the United States.

3.2.5 Tianjin Institute of Power Sources

(Tianjin 300381)

Dr. Wang Ji Qiang, Chief Engineer and Professor at the Tianjin Institute of Power
Sources, is well known in China and is involved in the 863 Program as it relates to advanced
battery development for the Beijing Green Olympic Games. He serves on several technologically
influential committees with the Chinese Government, works closely with lithium-ion battery
development companies, and knows the technology across the country. He also looks after the
activities of the “Testing Center of Chemical and Physical Power Sources of Ministry of
Information Industry.”

Tianjin Institute of Power Sources is one of the two national laboratories involved in
battery testing and evaluation activities and programs. This testing center of chemical and
physical power sources of the Ministry of Information Industry of China was established in
1985. It is claimed to be the largest, most comprehensive, most authoritative independent
quality-testing center for chemical and physical power sources.

The testing center of the Chemical and Physical Power Sources of China Ministry of
Information Industry (QSTC) is attached to the Tianjin Institute of Power Sources. QSTC is
located in Nankai District, Tianjin City, occupying 5,500 square meters. The testing center has
500 items of advanced testing equipment and instruments and more than 30 million RMB ($4.00
million) in fixed assets. At present, 76 staff members are in the center laboratory, and 48 of those
are professors and engineers. The QSTC center laboratory undertakes programs of the 863
Program, carrying out the tasks of EV battery supervision and test technology. Many types of
nickel metal hydride batteries, lithium-ion batteries, and super capacitors used in EVs have been
tested and evaluated at QSTC.

The QSTC center laboratory has been authorized by the National Authorization
Committee (#L0591) and China National Certification and Authorization Supervision and
Management Committee as a qualified laboratory for calibration and measurement. This center is

*
In March 1986, Deng Xiaoping launched China's National High-Tech Research and Development Program (also known as the
“863 Program” — see www.863.org.com). The overall goals of the 863 Program are to:
• Bridge China’s gap against developed countries in high-tech frontiers by pooling resources in selected high-tech fields.
• Drive science and technology advances in other relevant fields.
• Produce high-caliber technological R&D talents.
• Create opportunities for formation of high-tech industries and lay foundations for realizing national higher-level economic
and social development by around 2000.
 38

one of four laboratories in the world qualified to calibrate photovoltaic scales. It is also the
government-appointed laboratory to test imported and exported battery-related products (as well
as those used for passenger trains). The center laboratory is the consigned organization for the
testing of storage batteries for Underwriters Laboratories (UL) certification and is the appointed
laboratory of the China Quality Authentication Center. QSTC has acquired the hardware and
software of China compulsory 3C product certification (voluntary) and is able to offer relative
technical service and support.

The Center’s quality guarantee system is based on the requirements of ISO/IEC guideline
17025:2005, “Universal Competence Requirements for Testing and Calibration Laboratory.”
QSTC has also been approved as a National Defense Science and Technology Laboratory by the
National Defense Science and Technology Industrial Laboratory Committee.

The Center appears to have excellent testing equipment and to follow international testing
standards. It is able to test basic electro-chemical performance, environmental evaluation, and
safety for chemical and physical power sources by using standards established by the IEC, UL,
United Nations, Japan Institute of Standards, and the military. The power sources can be Zn-Mn,
lithium-ion, silver-zinc, Zn-air, and lead-acid batteries series. NiCd, alkaline, nickel metal
hydride, special kinds of batteries, silicon solar cells, thermoelectric generation series,
thermoelectric cooling modules, and sensors can also be evaluated at this Center.

Since its foundation, QSTC has completed many tests and experiments (such as national
testing, supervision of selective examination, performance evaluation, product grading
evaluation, quality testing, comparison experiments, product judicial judging, technical judging,
arbitration testing, export and import testing, and feasibility evaluation). At the same time, the
center laboratory is conducting research on various power sources charge/discharge equipment,
testing technology, and performance evaluation methods. The Center is actively providing
technology support and consultation to its clients to accelerate the quality of chemical and
physical power sources in China. QSFC has had extensive connections with counterparts at home
and abroad. The Center keeps the testing results from clients confidential.

The Center has the following testing and evaluation equipment:

• Pulsed solar simulator (German made)

• Automatic absorption spectrometer; made by Perkin-Elmer (United States)
• Digatron (charge/discharge instrument) (German made)
• Environmental testing equipment
• High-power charge/discharge instrument (German made)
• Arbin charge/discharge instrument (U.S. made)

Since 2001, a number of national projects have focused on the development of lithium-
ion batteries and related materials. There are two major basic research programs:

1. High-energy-density lithium batteries

2. R&D on new materials for lithium-ion battery applications
 39

The most important part of these two programs is a major technical innovation program
on the development of advanced batteries for EVs and HEVs, as well as for fuel cell electric
vehicle applications. There are also many programs supported by different state agencies and
local governments. These programs are related to basic and applied research on new battery
systems and new materials, as well as to pilot or mass production and trial applications of newly
developed materials and advanced batteries.

3.2.5.1 Progress in R&D of Advanced Materials for Lithium-Ion Batteries

In 2001, a National Major Program on R&D of advanced rechargeable battery systems

with a specific energy of 200–250 Wh/kg was set up and has since been conducted by a joint
research group that includes Wuhan University, Tianjin Institute of Power Sources, Beijing
Physical Institute of China Academy, and Harbin Engineering University. To achieve the above
goal of specific energy, the requirements for a 3.5–4.5-V system were set up as follows:
(1) advanced negative material specific capacity greater than 450 mA•h/g and more than 85%
efficiency for first charge-discharge cycle and (2) advanced positive material specific capacity
greater than 200 mA•h/g.

Possible candidate materials were selected, and some of them were thoroughly
investigated. Evaluations encompassed new material synthesis, property evaluation,
modifications, and performance of materials in the prototype cells. Among those explored further
were Li-Ni-Co-O and Li-Ni-Co-Mn-O systems for positive materials and carbon. C-Si composite
and lithium-alloy systems were evaluated as negative materials. Li/S or polymer-S systems with
lower voltage (below 3 V) were also investigated. Typically, some nano-size and surface-
treatment concepts were used for developing advanced battery materials. An optimum
combination of Li (Ni, Co, Mn) -positive material with a specific capacity of 220 mA•h/g and C-
Si composite negative material with a specific capacity of 550 mA•h/g and 91% efficiency for
first cycle was demonstrated in both 18650 and soft packaged cells. These cells exhibited
specific energy between 236 and 267 Wh/kg.

3.2.5.2 Progress in Developing Lithium-Ion Batteries for EVs, HEVs, and FCEVs

In 2001, Major National Programs on R&D of advanced rechargeable battery systems for
EVs, HEVs, and FCEVs were initiated. These programs are part of the Chinese 863 Program
(Electrical Project). R&D of high-energy-type (capacity range of 50–200 A•h) lithium-ion
batteries for EV and high-power (capacity of 8–40 A•h) lithium-ion batteries for HEVs and
FCEVs were developed. Liantian Company, Xinyuan Company, Leitian Company, and Beijing
Institute of Non-ferrous Metals are involved in the development of these batteries. The National
Testing Center reported a good deal of progress in evaluations related to specific energy, cycle
life at deep depth of discharge, and simulation of vehicle running conditions. High-power,
15-A•h batteries are used in fuel cell/battery hybrid cars for demonstration. These batteries have
been crash tested according to a national standard, and no hazard was observed.
 40

3.2.5.3 Progress in Developing New Lithium-Ion Batteries for E-Bike Applications

D-size cells with 5-A•h capacity and 10–15-A•h prismatic cells with Al-doped LiMn2O4
and Li(NixCoyMnz)O2 positive are being produced for e-bike applications. Also, high-power
18650 and 26650 cells with Li(NixCoyMnz)O2 and LiFePO2 positive materials have been
successfully developed and can run on a 10-h rate (C) of discharge.

3.2.6. Tianjin Lishen Battery Joint-Stock Co., Ltd.

(Tianjin 300384)

Tianjin Lishen Battery Joint-Stock Co., Ltd., established in 1998, is located in the Tianjin
Huayuan Hi-Tech Industry Park. The company occupies an area of 85,000 m2 and employs
5,000 people. It has a capitalization of 600 million RMB ($80.00 million), and its total
investment has reached 1.5 billion RMB ($200.00 million). Tianjin Lishen Battery Joint-Stock
Co., Ltd., has imported advanced automatic production equipment from Japan, so the production
of lithium cells is completely automatic.

By 2004, the company had an annual production capacity of 200 million cells, which
consist of more than 100 specifications, ranging from cylindrical to prismatic lithium-ion
batteries. Relying on its intellectual property rights, with the innovation-oriented institution and
supportive policies, Tianjin Lishen Battery Joint-Stock Co., Ltd., has become one of the largest
manufacturers of lithium-ion batteries and possesses the most advanced technology in China.
The Chinese Version of Forbes magazine ranked Lishen as number eight in its “List of Highest
Potential Enterprises” in China for 2006.

Since its inception, Tianjin Lishen Battery Joint-Stock Co., Ltd., has been focusing on
management — putting quality as the top priority and pursuing battery innovations. The quality
and performance of the company’s cells appears to be world-class. Tianjin Lishen Battery Joint-
Stock Co., Ltd., has obtained the certification of ISO9001-2000, CE (Conformité Européenne;
French for “European Conformity”), UL, and ISO14001. These certifications have paved the
way for the company to capture international and domestic market shares. Tianjin Lishen Battery
Joint-Stock Co., Ltd., is supplying batteries to corporations such as Motorola ESG and Samsung.
Recently, the company set up branches in North America, Europe, Korea, Taiwan, and Hong
Kong in an effort to establish a powerful worldwide-marketing network. Its business is 60%
export and 40% domestic.

Tianjin Lishen Battery Joint-Stock Co., Ltd., is said to have always valued technology
research highly, and it has increased its investment in R&D. Recently, it has set up a
Postdoctoral Workstation and a National Technology Center. In 2005, it has established a world-
class Safety Test Center. These efforts ensure continuous development of quality battery
products.

Tianjin Lishen Battery Joint-Stock Co., Ltd., recently developed a new type of lithium-
ion battery, and its cathode material is LiFePO4 from Valence. Battery performance is good and
 41

safe. This battery is being evaluated by CATARC in battery electric vehicles. It also makes
18650 cells at this plant.

Tianjin Lishen Battery Joint-Stock Co., Ltd., makes both prismatic and cylindrical cells.
The prismatic cells are used in mobile phones, portable PCs, digital cameras, MP3 players, and
other high-technology devices. The cylindrical cells are used in portable PC, E-book, and
satellite communication devices; digital video cameras and portable DVD players; and portable
printers/portable scanners. High-power prismatic cells are designed for e-bikes, EVs, HEVs, and
power tools.

Last year, the company sold 33,000 lithium-ion batteries for e-bikes and provided
batteries for seven electric buses, four hybrid buses, and two fuel-cell-battery hybrid buses.
These vehicles are now being evaluated at various universities and test centers.

Tianjin Lishen Battery Joint-Stock Co., Ltd., has 22 patents on all aspects of lithium-ion
battery technology, as well as on manufacturing techniques. These patents are held in China, the
United States, Japan, Europe, Korea, and Taiwan.

The Chinese government has awarded Tianjin Lishen Battery Joint-Stock Co., Ltd., with
an initial 50 million RMB/year ($6.67 million/year) for three years and 80 million RMB/year
($10.76 million) for two years of subsequent work in manufacturing. Funding was possible
because the company is located in Tianjin Huayuan Hi-Tech Industry Park, which is a declared
tax-free zone.

The estimated cost of its cylindrical cell is 7 RMB/Wh ($0.93/Wh), and the estimated
cost of the prismatic cell is 6 RMB/Wh ($0.80/Wh). The estimated cost of a high-power cell is
12 RMB/Wh ($1.60/Wh).

3.2.7 Tianjin Lantian Double-Cycle Tech. Co., Ltd.

(Tianjin 300384)

In 2000, China Electronic Technology Group Corporations and Tianjin Metallurgical

Group Co., Ltd., founded Tianjin Lantian Double-Cycle Tech. Co., Ltd., a high-tech enterprise.
With capital of 93 million RMB ($1.24 million), it is specializes in research, development, and
marketing of lithium-ion batteries and EVs. It is also engaged in research, development, and
production of NiMH battery technology. The company has more than 500 employees, with an
R&D staff of more than 150, including 30 postdoctoral fellows and 38 Ph.Ds.

The company has undertaken the EV project of the National 863 Program. A number of
Tianjin’s key projects include the development of lithium-ion batteries, an efficient electric
machine, a controller, e-bikes, and EVs and associated parts. The company holds six patents, and
six patents are pending. Tianjin Lantian Double-Cycle Tech. Co., Ltd., is certified by ISO 9001-
2000, CE, and UL.
 42

Tianjin Lantian Double-Cycle Tech. Co., Ltd., receives a 50 million RMB ($6.67 million)
grant per year from the government. Its production facility is, at best, semi-automatic. Last year
alone, the company sold 27,000 e-bikes with lithium-ion batteries at a cost of 3,000 RMB/bike
($400/bike). The company is working on an EV bus battery, and it has provided six 500-A•h
batteries for testing and evaluation. These batteries are being developed within the National 863
Program.

3.2.7.1 Cell Production and Applications

Tianjin Lantian Double-Cycle Tech. Co., Ltd., produces three different cells as the high-
energy and high-power lithium battery for EVs and cells for e-bike applications. Table 7
provides details on these cells.

TABLE 7 Tianjin Lantian Double-Cycle Tech. Co., Ltd., Cells for E-Bike Applications

Operating
Capacity Voltage Weight Dimensions Temperature Cycle Life
Cell Model # (A•h) (V) (kg) (mm × mm) (°C) (80% DOD)

ICR 47/205 18 3.6 0.8 47 dia × 205 -20 ~ 55 800

ICR 50/380 55 3.6 1.8 50 dia × 380 -20 ~ 55 800
ICR 65/400 100 3.6 2.6 65 dia × 400 -20 ~ 55 800

Table 8 lists details on high-power lithium-ion batteries for power tools and HEVs.

TABLE 8 Tianjin Lantian Double-Cycle Tech. Co., Ltd., Cells for Power Tools and HEVs

Rate Operating
Cell Capacity Voltage Discharge Weight Dimensions (mm Temperature Cycle Life
Model # (A•h) (V) (C) (kg) × mm) (°C) (80% DOD)

ICR 8 3.6 15 0.45 45 dia × 150 -20 ~ 55 800

45/150
ICR 1.8 3.6 15 0.055 25 dia × 50 -20 ~ 60 800
25/50
ICR 3 3.6 10 0.125 32 dia × 65 -20 ~ 60 900
32/65
 43

Table 9 shows details on other lithium-ion cells for additional applications for e-bikes.

TABLE 9 Details on Other Lithium-Ion Cells for E-Bikes

Capacity Voltage Weight Volume

Cell Model # (A•h) (V) Time Discharge (kg) (L) Cycle Life

36V/9A•h 9 36 1 h 48 min (5A) 2.8 3.5 600

24V9A•h 9 25 1 h 48 min (5A) 2 2 600

Table 10 provides details on lithium-ion cells for electric motorcycles and other EVs.

TABLE 10 Tianjin Lantian Double-Cycle Tech. Co., Ltd., Cells for Electric
Motorcycles and Other Electric Vehicles

Max Discharge
Voltage Current Weight Volume
Cell Model # (V) (A) (kg) (L) Cycle Life

24 V/20 A•h 24 20 10 5.5 >800

24 V/55 A•h 24 60 17 10.5 900
36 V/20 A•h 36 20 12 7.0 900
36 V/55 A•h 36 60 23 13.5 800
288 V/100 A•h 288 150 230 115 800

3.2.7.2 Other Information on Tianjin Lantian Double-Cycle Tech. Co., Ltd.

• The company wants to export its products and would like to have a
relationship with U.S. companies.

• The company has designed a battery for a hybrid vehicle with a capacity of
7.5 A•h, 96 cells (12 cells per module). It has fabricated 20–30 packs for
laboratory and in-vehicle evaluations.

• The company would like to provide batteries for benchmarking in the United
States, and it believes that doing so will enhance its potential for cooperation.
 44

3.2.8 Suzhou Phylion Battery Co., Ltd.

(Jiangsu 215011)

Phylion is a battery technology corporation set up by Legend Capital Co., Ltd.; the
Institute of Physics of the Chinese Academy of Sciences; and the Chengdu Diao Group. Phylion
has 82 million RMB ($10.93 million) and a staff of more than 400. Phylion specializes in
manufacturing and selling lithium-ion cells with high capacity and current. Phylion’s technology
is primarily used in defense, electric bicycles, lighting, portable electronics, medical equipment,
and battery-operated tools.

As one of China’s largest manufacturers of lithium-ion battery cells, Phylion’s average

volume is currently 36 million units per year. Phylion’s high-capacity (10 A•h) and high-power
(7.5 A•h) lithium-ion cells have successfully passed U.S. testing by Underwriters Laboratories,
which paved the way for exporting the technology to the industrial world. Phylion benefited
from technical assistance from the Institute of Biophysics of the Chinese Academy of Sciences
(for about 15 years), funding support by The National Program #863 and #973, and further
assistance from the Development and Reformation Committee (for the last 12 years). This
combined funding enabled Phylion to accumulate experience as a company and establish a solid
technical foundation to develop lithium-ion battery technology. Phylion has a 10 million RMB
($1.34 million) grant from the federal government to conduct basic and applied R&D on lithium-
ion battery technology for e-bike, EV, and HEV applications. Furthermore, internally developed
patents have been applied in the development of lithium-ion technology and methods of
production. The company holds 17 patents on various aspects of lithium-ion battery technology.
Phylion uses LiMn2O4 as the cathode in the lithium-ion battery.

Phylion’s production facility is semi-automatic. All material mixing, cell size cutting, and
cell tabbing are done manually. The production equipment is imported from Japan, with 90%
financial assistance from state and federal governments. In 2006, Phylion sold 52,000 packs for
various applications and sold 32,000 e-bikes. The company builds 50 packs of different types for
EV and HEV applications. Phylion has cooperative programs with Shanghai Automobile Group,
North Automobile Group in Beijing, and Tongji University in Shanghai. At present, Shanghai
Automobile Group is evaluating Phylion’s lithium-ion battery in a fleet of passenger vehicles,
which includes EVs, HEVs, and fuel-cell-battery hybrid vehicles. The North Automobile Group
is evaluating batteries in electric buses, and Tongji University is conducting an evaluation of
batteries in fuel-cell-battery hybrid vehicles.

Phylion has conducted several experiments to determine the safety of the lithium-ion
battery and has provided some experimental data, which are summarized in the following
sections.

3.2.8.1 Overcharging Experiment

The overcharging experiment involved charging the electric cores with the constant
current and setting up the upper limit for the fixed voltage. The interior electric core will raise
the dendrite growth in the cathode. The tests are summarized in Table 11.
 45

TABLE 11 Summary of Tests Involving Charging Electric Cores with Constant Current and
Setting Upper Limit for Fixed Voltage

Environmental
Temperature Charging Experimental Time Result
Standard Premise (°C) Current Process Requirements Requirements

War Industry After 20 ± 5 0.2C 5A Until the No No explosion

charging, protective and burning
according to circuit
the standards functions

QB/T25022000 The cell in the 20 ± 5 0.2C 5A Make the 12.5 h No explosion

Standards of Light state of protective and burning
Industry complete circuit function
discharging

04 Department of After 20 ± 5 1C 1(A) The voltage Or charge for No explosion

Science and charging, reaches 5.0 V 90 min and burning
Technology according to
[863 Program], the standards;
Storage Battery of discharge for
Electro-motion an hour
Bicycle

National Standards After 20 ± 5 3C 5 A The upper After declining No explosion

GB/T 18287-2000 charging, limit of voltage the peak value and burning
according to is 10 V 10 min, end the
the standards experiment.

Underwriters After 20 ± 5 Carry through the relative The testing time No explosion
Laboratories charging, current and time, according cannot be and burning
Standards according to to: shorter than
the standards 48 h

.
Note: C is the standard
capability. Ic is the testing
current.

3.2.8.2 Experiment with Nail Penetration

Table 12 summarizes the tests involving experiments with nail penetration.

 46

TABLE 12 Summary of Tests Involving Nail Penetration

Environmental Steel Time Result

Standard Premise Temperature Needle Experimental Process Requirements Requirements

War Industry After 20 ± 5 Φ Strongly penetrate No No explosion

charging, 3mm along the radial requirements and burning
according to
the standards

Standards of Light After 20 ± 5 2.5 ～ Penetrate in the Place more No explosion

Industry iQB/T2502- charging, 5 mm direction that the than 6 hours and burning
2000 according to center and electrode
the standards surfaces are vertical

2004 Department of After 20 ± 5 φ3～ Promptly penetrate in The steel No explosion

Science and charging, 8 mm the direction to which needle sticks and burning
Technology according to the pole plate is in
[863 Program], the standards vertical
Storage Battery of
Electro-motion
Bicycle.

Underwriters After 20 ± 5 Bounce to the cells at the minimum acceleration No explosion

Laboratories charging, of 75 g and the maximum acceleration of and burning,
Standards according to 125～175g within 3 ms on the face and side face ejection ≤ 5 g
the standards of the cell

3.2.8.3 Thermal Impact

Table 13 summarizes the tests involving experiments with thermal impact.

 47

TABLE 13 Summary of Tests Involving Thermal Impact

Velocity of
Ascending Upper Limit Time Result
Premise Temperature Temperature Requirements Requirements
War Industry After The battery oscillates circles for four cycles No deformation,
charging, between -40 ± 2°C and 70 ± 2°C. Maintain the end crack, and
according to temperature for 2 hours in each temperature leakage after the
the standards environment. The mobile time of alternating the test; normally
temperature cannot be longer than 1 minute; charge and
maintain temperature for 2 hours below 25°C. discharge

Standards of Light After 5±1 110°C 60 min No explosion and

Industry QB/T2502- charging, burning
2000 according to
the standards

2004 Department of After 5±2 70 ± 2°C 20 min No leakage,

Science and charging, deformation,
Technology according to explosion, or
[863 Program], the standards burning
Storage Battery of
Electro-motion
Bicycle.

National Standards After 5±2 95 ± 2°C 30 min No explosion and

GB/T 18287-2000 charging, burning
according to
the standards

Underwriters After 5±2 95 ± 2°C 10 min No explosion and

Laboratories charging, burning
Standards according to
the standards
 48

3.2.8.4 Other Information on Phylion

• Phylion would like to export its products and have relationships with
U.S. companies.

• Phylion would like to provide batteries for benchmarking in the United States
to enhance its potential for cooperation.

3.2.9 Tongji University

School of Automobile Engineering
(Shanghai 201804)

In 2002, the College of Automotive Engineering was formally established in the

Shanghai International Auto City in Jiading District. It was founded by merging the Automotive
Engineering Department, the New Energy Center of Automotive Engineering, and the College of
Automobile Marketing and Management, in accordance with the requirements of the Shanghai
Automotive Industry.

The College has a staff of 64, of which 19 are full professors, 16 are associate professors,
and 13 are lecturers. The College has 730 full-time undergraduate students, 124 master’s degree
students, and 27 doctoral students. There are 11 postdoctoral researchers in the postdoctoral
mobile research center. In addition, the College has set up an internship program at the master’s-
degree level with several automobile companies. The College has extensive collaborative
programs with several universities in Germany and the United States.

The Advanced Technologies Laboratories have the following facilities:

• Vibration laboratory
• Acoustic laboratory
• Engine dynamometer laboratory
• Fuel cell testing and evaluation laboratory
• Advanced battery testing and diagnostics laboratory
• Vehicle testing track
• Vehicle diagnostics laboratory
• Large-scale software and analysis laboratory
• Testing and evaluation of vehicles laboratory
• Aero-dynamic laboratory

At the School of Automotive Engineering, Tongji University has world-class facilities to

integrate advanced batteries and fuel cells in vehicles and conduct basic and applied research for
the automotive industry. These testing capabilities are comprehensive and cover research,
testing, and evaluation. The equipment and capabilities are impressive.
 49

The School of Automotive Engineering is involved in extensive research with lithium

battery development companies, fuel cell development companies, and domestic and foreign
automobile companies.

3.2.9.1 Automobile Companies

• Shanghai FCV Powertrain Co., Ltd.

• Volkswagen

• China Automobile Association

• China Automobile Dealers Association

• German engineering company, IAV GmbH (Ingeniergesellschaft Auto und

Verkehr)

• EDS PLM Solutions

• Toyota Motor Co.

• Nissan

• General Motors

3.2.9.2 Battery Development Companies

• Huanyu Group
• CITIC Guoan Mengguli Corporation (MGL)
• Beijing Green Power Technology Co., Ltd.
• Beijing Oriental Polymer New Energy Co., Ltd.
• Leitian Green Electric Power Supply (Shenzhen) Co., Ltd.
• Thunder-Sky Battery Co.
• Suzhou Polylion Battery Co.

3.2.9.3 Fuel Cell Development Companies

• Shanghai FCV Powertrain Co., Ltd.

• Wan Xiaing FC Company
• Hang Zhou Energy Co.

The School of Automobile Engineering has seven fuel cell battery hybrid vehicles from
three different developers to test and evaluate on the dynamometer and on the track. Each of
 50

these vehicles has a 15-kW polymer electrolyte membrane fuel cell stack and 10-kWh lithium-
ion batteries. Faculty would like to have these vehicles ready for the 2008 Olympics. Argonne
staff had an opportunity to ride in and drive two of these vehicles. The vehicles rode smoothly,
and acceleration was as good as that of U.S.-manufactured vehicles. One of the vehicles had
accumulated 20,140 km, and the other had 12,300 km. The lithium-ion batteries in both of these
vehicles performed well and have a capacity of around 95% that of the original. These vehicles
are small compared with U.S. vehicles — they weigh approximately 950 kg and carry four
passengers.

Tongji University is very well connected with federal and state governments. The
President, Dr. Gang Wan, is very well connected with the federal Department of Science and
Technology. Recently, Dr. Wan became the Minister of MOST. He is also well associated with
the state government and local automotive industry. Tongji receives a 15 million RMB
($2.00 million) grant from the federal government and 10 million RMB ($1.34 million) from the
state government. It also receives several million RMB from automotive companies (the
university did not want to disclose the names of those companies).

3.2.9.4 Other Activities at the School of Automobile Engineering

• A car, called Chao Yue I, which means “surpass,” was built by Shanghai Fuel
Cell Vehicle Power Train Co., under the direction from Tongji University,
Shanghai Automotive Industry Corp., and other city departments. A total of
$4.57 million RMB, from a central government grant, was used to develop the
new hydrogen-based fuel cell vehicle engine. An additional $9 million RMB
was offered to the company to continue further development of hydrogen fuel
cell vehicles through 2007. Fuel-cell-powered cars are viewed as the most
suitable vehicle for family use in China because they do not produce any
harmful emissions — a great advantage as the country turns to vehicular
mobility.

• The Beijing Oriental Company Group and Tongji University are building a
new hydrogen refueling station in Shanghai. Tongji University is responsible
for the overall management, while Shell, which is funding part of the project,
is working with the school on the design, construction, maintenance, and
operations of the station. The Beijing Oriental Company is providing the
engineering and procurement services needed to deliver the packaged
hydrogen compression, storage, dispensing system, and trucked-in
compressed hydrogen for the station. This station is due for completion by the
end of the year and will refuel 3 buses and 20 cars. The project is part of the
Chinese Ministry of Science and Technology’s national program for the
commercialization of fuel cell vehicles in the country.

Tongji University is seriously interested in benchmarking advanced battery technology in

the United States. University staff members have agreed to discuss this idea further with their
battery development partners.
 51

3.2.10 General Research Institute for Nonferrous Metals,

Institute of Energy Materials and Technology Lab of Li-ion Battery
(Beijing 100088)

The General Research Institute for Nonferrous Metals (GRINM), established in 1952, is
the largest R&D institution in the field of the nonferrous metals industry in China. Dr. Hailing
Tu, a well-known expert on semiconductor materials in China, is the president. Since its
establishment, GRINM has carried out more than 5,000 projects. After 50 years of development,
research areas have expanded to include microelectronic and photoelectronic materials, rare and
precious metals materials, rare earth materials, energy technology and materials, special alloy
powder and powder metallurgy materials, superconductor materials, nanotechnology and
materials, infrared optical materials, nonferrous metals processing technology, advanced mineral
processing and metallurgy, nonferrous metal composites, materials analysis, and testing. GRINM
is a comprehensive research institute covering a wide range of research areas. One R&D area in
which GRINM is involved is the development of lithium-ion battery technology for e-bikes,
EVs, and HEVs, as well as for other portable applications, such as cell phones, camcorders, and
various other electronic devices.

GRINM has also established a broad technical exchange, cooperation, and trading
partnership with counterparts in more than 30 countries and regions. The institution is always
ready to cooperate with partners around the world for mutual growth and development.

GRINM is conducting basic research on the materials needs and requirements for high-
energy and high-power lithium-ion battery technology. It has focused on nanotechnology and
LiMn2O4 materials for the cathode, graphite for the anode, and PC+DC+DMC+1m Li P F6
liquid electrolyte and PP/PE/PP separator for the development of a lithium-ion battery cell.
GRINM developed all materials in house except for the separator, which it imports from Japan
and the United States.

3.2.10.1 GRINM’s Lithium-Ion Cells

GRINM has designed several lithium-ion cells; some properties and data are given in
Table 14.

In some test results, GRINM showed that ampere-hour capacity dropped to 80% at the
end of 800 cycles and to 60% at the end of 1,200 cycles. GRINM has fabricated 1,200 cells in
each of the above categories.

At present, GRINM is working with Weifang Jade Bird Huanguang Battery Co., Ltd.
This battery company will manufacture cells and batteries for EV and HEV applications, and
these batteries will be integrated in the First Automotive Factory of China’s electric and hybrid
vehicles. GRINM has 10 e-bikes, two EVs, and two hybrid vehicles that are being evaluated.
 52

TABLE 14 Properties and Data from GRINM Lithium-Ion Batteries

Battery Model

Parameter HP-40 HP-30 HP-25 HP-17 HP-10 HP-8

Nominal Voltage 3.6 3.8 3.8 3.8 3.8 3.8

Average Capacity 40 30 25 17 10 8
(A•h)

Diameter × Dia 56 × 258 Dia 56 × 228 Dia 47 × 341 Dia 47 × 288 Dia 47 × 180 Dia 47 × 165
Height (mm)

Typical Weight 1.55 1.48 1.17 0.98 0.60 0.45

(kg)

Volume (dm3) 0.64 0.60 0.59 0.50 0.31 0.28

Specific Energy 110 80 85 70 85 65

(Wh/kg)

Specific Power 898 1,048 1,082 1,320 1,500 1,450

(W/kg)
(10 s/50% DOD)

Imax 400 300 250 270 200 200

Max Discharge
Current (A)

Voltage Limits
Charge (V) 4.2 4.2 4.2 4.2 4.2 4.2

Discharge (V) 2.8 3.2 3.2 3.2 3.2 3.2

The institute receives 5 million RMB per year ($0.67 million/yr) in grants from the
federal government. It has 2,000 employees, and 38 are working on lithium-ion batteries. The
Institute has seven patents, primarily on materials and cell design.

3.2.10.2 Other Information on GRINM

GRINM has an excellent record in terms of cooperating with other countries. The
institute has shown very strong interest in a cooperative effort to benchmark its technology in the
United States. Also, GRINM is interested in cooperating with other organizations to develop a
lithium-ion battery for vehicular applications.
 53

3.2.11 Beijing Institute of Technology

BIT EV Center of Engineering and Technology
(Beijing 100081)

The Chinese government has designated Beijing Institute of Technology (BIT) as the
Center of Excellence for the EV Bus Development Program. BIT is the most prestigious institute
in China. It has excellent laboratories with the most modern equipment for testing and evaluation
of each component of an electric bus. Also, BIT can evaluate electric buses and passenger cars
on a dynamometer and on controlled tracks.

A typical lithium-ion battery for a large-bus application consists of 108 cells in series and
four banks in parallel to provide 400-A•h capacity with nominal 388 V. They charge cells to
4.2 V and discharge to less than 3 V.

3.2.11.1 Bus Manufacturing and Related Technology

BIT is working on bus manufacturing with the following companies:

• Beijing Beifang Huade Niopolan Bus Company, Ltd.

• Jinghua Bus Company, Ltd.
• BIT Clean Electric Vehicle Company, Ltd.

The technology that is being used for electric buses is described below.

Rare-earth charging flux permanent magnet direct current motor:

• Rare-earth permanent magnet and increasing magnetic winding combined

excitation

• Rotor-adopting no-groove structure

• Increasing magnetic winding links to re-flowing current loop to auto-decrease

magnetic field

Controller of rare-earth charging flux permanent magnet direct current motor:

• High-frequency PWM control

• Auto-decrease to realize the modulation
• Current of close loop controller
• Recovery of regenerative breaking energy

System parameters:

• System efficiency >92%, with 80% high-efficiency area for 84.4% of the time
• 75 kW/125 kW; maximum moment of system at 1,200 Nm
 54

• Line-control two-speed gear box

Specifications for electric ultra-low-floor bus:

• Lithium-ion battery, 388.8 V @400 A•h

• Power driving system: three-phase, asynchronous alternating-current motor,

175 kW

• Wheelbase (mm): 5,800

• Wheel span (front/rear) (mm): 2,340/3,440

• Curb mass/full-load mass (kg): 12,930/16,000

• Max velocity (km/h): 91

• Driving range (40 km/h): 210 km

• 0–50 km/h acceleration time in s: 20.7

• 30 km/h braking distance in m: 8.2

BIT has 12 electric buses that are being evaluated. These buses will be put in use during
the 2008 Beijing Olympics. Nearly all of the laboratory’s equipment to evaluate electric buses
has been imported from Germany, Japan, and the United States.

BIT is 100% supported by the Chinese federal and state governments. BTI has several
patents on electric drive trains for buses, as well as for passenger vehicles.

3.2.11.2 Other Information

BTI is interested in working with U.S. companies on electric buses, as well as on

component technologies.

3.3 LITHIUM-ION BATTERY MANUFACTURING IN CHINA

The production and manufacturing of lithium-ion batteries has expanded enormously in

the past two to three years. These batteries are widely used in consumer electronics devices, such
as cellular phones, camcorders, and portable computers. This market is growing so fast that it is
only second behind the development of information technology. Battery manufacturing ranges
from manual operations to full automation. Labor cost also plays a significant role in
manufacturing lithium-ion batteries. Currently, China has between 275,000 and 325,000 workers
in the battery industry. Labor costs in China are very low compared with labor costs in the west
 55

and Japan. Approximately 435 batteries companies in China produce batteries. The total output
in 2006 was 78.7 billion Yuan ($1.06 billion).

The Chinese government aggressively supports the development of new types of

batteries, such as lithium batteries, fuel batteries (fuel cell), and solar batteries. China’s 10th five-
year plan and 863 Program listed the lithium battery and related key materials as an important
research project in the new material field, which greatly promoted the research and development
of the lithium battery. To realize the goal of holding a “Green Olympics” in Beijing and to
welcome the Shanghai World Expos in 2010, Beijing and Shanghai launched a series of
regulations, policies, and measures to promote applications of the battery for automobiles to
reduce exhaust emissions and protect the environment. In October 2003, the National
Development and Reform Commission, Ministry of Science and Technology, developed a solar
energy R&D plan for implementation in the next seven years — the “Bright Project” of the
National Development and Reform Commission will raise 10 billion Yuan ($1.35 billion) to
promote applications for solar power generating technologies, and the installed capacity of
China’s solar power generating system is expected to reach 300 MW by 2009.

Because of the reduced use of NiMH batteries and nickel-cadmium batteries and the
popularization of mobile electronic products such as mobile phones, digital computers, digital
video, and personal data acquisition, the use of lithium-ion batteries surged, and the potential of
these batteries in the rechargeable battery field is significant. Worldwide, the output of lithium-
ion batteries surpassed that of nickel-cadmium batteries in 2003, and the trend continued in 2004.

The number of shipments of mobile phones and laptops continued to increase in recent
years, although the growth of mobile phones slowed down in 2005. The growth, however, of
laptops, DCs, and DVs enabled the rate of growth of the lithium-ion battery industry to remain
high. The compound growth rate of world production of the lithium ion battery reached 23%
during 2004–2006; the compound growth rate of sales revenue will reach 12.3%, according to
MOST. During 2007–2010, the lithium-ion battery industry will enter a stable growth period,
during which the rate of growth in production is expected to be 9.85%, and the compound
growth rate of sales revenue is expected to reach 5.85%, according to the Tianjin Institute of
Power Sources.

The lithium polymer battery was mass-produced in 1999, and the growth rate of these
batteries is always higher than that of the lithium-ion battery. The lithium polymer battery
accounted for 7%, 8%, and 10%, respectively, of the market share for lithium-ion batteries in
2002, 2003, and 2004.

R&D trends of the lithium-ion battery industry include further increases in energy
density; safer environmental performance; lower manufacturing cost; development of new
electrode materials; development of lighter, thinner batteries; and development of improved
manufacturing techniques.
 56

3.4 JOINT VENTURES AND PARTNERSHIPS

Western and Japanese companies are setting up joint ventures and/or partnerships with
Chinese battery companies because of the widespread incentives available to Chinese companies.
Chinese companies receive more incentives if they are producing batteries for export. At present,
Chinese companies are providing batteries for electronic and portable applications worldwide.
Because the initial investment to produce lithium-ion batteries is very high, producing batteries
in China is cost-effective.

The following paragraphs briefly describe the relationships of various western and
Japanese companies with Chinese battery companies for production of lithium-ion batteries.

Shenzhen BAK Battery Co., Ltd., has signed manufacturing agreements with (1) Lenovo
Group, Ltd., for portable and tabletop personal computers and cell phone markets and (2) A123
Systems for high-power lithium-ion battery technology based on patented nanotechnology. The
Strategic Cooperation Agreement with Lenovo calls for both companies to jointly contribute and
share resources to further product-development efforts. The company has been a supplier of
lithium-ion battery cells for Lenovo’s cell phones since last year (2005). This Agreement was
signed to expand the current relationship and facilitate the development of new battery sizes for
Lenovo in the portable and notebook PC markets. Shenzhen BAK Battery Co., Ltd., and A123
have collaborated since early 2005 to design, develop, and implement an advanced mass-
production line to exclusively manufacture first products for A123. The A123 Systems nano-
phosphate lithium-ion technology is based on patented technology developed at the
Massachusetts Institute of Technology (MIT). The A123 high-power batteries will be used in a
variety of applications, including power tools, medical devices, and hybrid electric vehicles. In
2005, Shenzhen BAK Battery Co., Ltd., raised approximately $60 million that enabled a
significant expansion of manufacturing facilities, which increased production from 15 million to
22 million batteries per month. Shenzhen BAK Battery Co., Ltd., also established volume
production capability for lithium-polymer battery cells and constructed a production line for a
new high-power battery cell initially directed toward the cordless power tool market and other
applications. Shenzhen BAK Battery Co., Ltd., has successfully launched its first automated
cylindrical lithium-ion battery cell production line. The new production line employs advanced
technologies and automation for the manufacture of consistently high-quality cylindrical cells for
notebook computers. The monthly production capacity has reached two million units.

ARIA Investment Partners II, a fund managed by CLSA Private Equity Management,
Ltd., has invested $10 million in China’s Great Speed Enterprises, Ltd., a holding company of
Scud (Fujian) Electronics Co., Ltd. Scud Electronics is one of the largest makers of lithium-ion
batteries for mobile phones in China. Its retail distribution network has more than
200 wholesalers, which manage over 100,000 points of sales and cover all the provinces and
large cities across China.

Advanced Battery Technologies, Inc. (ABAT), a subsidiary of Beijing Tonghe Jiye Trade,
Ltd. (Tonghe Jiye), has received an order for 100,000 mine-use lamps using ABAT’s 3.7-V,
9-A•h lithium-ion polymer batteries. This order has a total contract value of 24.8 million RMB
(about $3 million). The Chinese government has given ABAT a safety certificate that allows the
 57

production of mine-use lamps using this battery. Mine-use lamps have an annual market of about
$120 million in China. ABAT is resuming production in its newly built factory in Heilongjiang,
China, with three production lines. The new factory has a daily lithium-ion polymer battery
production capacity of 50,000 A•h per 8-h shift, which is 10 times the capacity of the preexisting
plant. The old facility is being converted into an R&D laboratory. The company’s products
include rechargeable lithium-ion polymer batteries for electric automobiles, motorcycles, mine-
use lamps, notebook computers, walkie-talkies, and other personal electronic devices. ABAT has
filed a patent application for its nano-lithium-ion battery system. ABAT has been developing a
new polymer lithium-ion battery by using lithium titanate spinel nanomaterials provided by
Altair Nanotechnologies, Inc. ABAT has developed a method for incorporating the
nanomaterials into its battery. The company has shipped its first group of new nano-lithium-ion
batteries to its U.S. customer. The nano-lithium-ion batteries use lithium titanate spinel electrode
nanomaterials provided by Altair Nanotechnologies, Inc.

Fengfan Storage Battery Co., Ltd., and the Hongwen Group jointly developed a lead-acid
production facility in Guizhi, Tanshang City, of North China’s Hebei Province, with an
estimated investment of one billion yuan ($121 million). Fengfan contributed 51% of the
investment, and Hongwen contributed the remaining 49%. The Fengfan-Hongwen storage
battery project will mainly produce batteries for use in automobiles. This joint venture plans to
develop lithium-ion battery technology for portable and automobile applications.

Inco has officially opened its joint venture nickel foam plant — Inco Advanced
Technology Materials (Dalian) Ltd. — in Dalian, China. Nickel foam is a specialty nickel
product used in NiCd and NiMH rechargeable batteries, including batteries used as a power
source for hybrid automobiles.

According to China Customs statistics, mainland China’s battery production volume

currently represents at least 25% of the global supply. Some industry sources say the percentage
may even be as high as 50%. The China Industrial Association of Power Sources reported that
28 billion units of batteries were produced in mainland China in 2004. The 151 battery makers
included in their report represent about 70% of mainland China’s production capability. These
have an individual output of between 5,000 units and 170 million units monthly, with about 96%
of them operating at 70% of production capacity. Most of the battery makers are located in
Guangdong, Shanghai, Zhejiang, Jiangsu, Tianjin, Shenyang, Fujian, and Harbin. Other findings
in this report include:

1. Mainland China is the world’s largest supplier of alkaline batteries, with

output of primary cells reaching 22 billion units in 2004. Production was
increased by 10% in 2005.

2. Over 800 million units of NiMH batteries were manufactured in mainland

China in 2004. This is about 40% of the global supply in 2004. Exports of
NiMH batteries totaled 675 million units, valued at $442 million in 2004.
About 60 new companies included NiMH rechargeable batteries in their
product lines in 2005.
 58

3. About 30% of the world’s requirement for sealed lead-acid batteries is

supplied by mainland China. Shipments of sealed lead-acid batteries totaled
about 107 million units in 2004, which was an increase of 25% from 2003. In
2005 and 2006, electric vehicles, uninterrupted power sources, emergency
lighting, security systems, and industrial applications drove the demand for
sealed lead-acid batteries. Mainland China’s production of NiCd batteries hit
1 billion units in 2004. Production is expected to grow by 5–10% in the next
five years. Exports of NiCd reached 826 million units in 2004, valued at $411
million.

Ovonic Battery Company, Inc., has entered into a patent license agreement in connection
with its proprietary NiMH battery technology with Hunan Corun Hi-Tech Co., Ltd., of the PRC.
Under the consumer battery license grant, Hunan Corun has a royalty-bearing, nonexclusive right
to make, use, and sell NiMH batteries for consumer and nonpropulsion applications. Hunan
Corun was founded in 2001. Its factory is located in the Chao Yang economic development zone
in YiYang, Hunan, within the PRC. Hunan Corun manufactures a wide range of NiMH products,
has approximately 3,000 employees, and produces a variety of battery chemistries. Ovonic also
entered into a patent license agreement in connection with its proprietary NiMH battery
technology with Zhejiang Kan Battery Co., Ltd., of the PRC. Under the consumer battery license
grant, Zhejiang Kan has a royalty-bearing, nonexclusive right to make, use, and sell NiMH
batteries for consumer and nonpropulsion applications. Zhejiang Kan was founded in 1993 and is
technically affiliated with Zhejiang University. Zhejiang Kan’s factory is located in Suichang,
Zhejiang, and its marketing office is in Hong Kong. Additionally, Ovonic has entered into a
patent license agreement in connection with its proprietary NiMH battery technology with L&K
Battery Technology Co., Ltd., of the PRC. Under the consumer battery license grant, L&K
Battery has a royalty-bearing, nonexclusive right to make, use, and sell NiMH batteries for
consumer nonpropulsion applications.

Suntech Power has signed a letter of intent with Wanzhou District of Chongqing
Municipality to construct a battery production base involving an investment of 200 million yuan
($24.9 million). Its local partner will be Wanguang Power Source, an old state-owned enterprise.
The state-owned Assets Supervision and Administration Commission of Wanzhou District is
negotiating with Suntech on acquisition details. Wanguang Power Source makes storage batteries
used in automobiles and motorcycles, with annual output valued at 180 million yuan
($24.3 million). It is 51% held by Wanguang Industrial Group, 29.9% by Lifan, and 16.63% by
Chongqing Xinmiao Technology Investment Company. Low labor cost is a factor that affects
Suntech’s domestic expansion scheme. Suntech, which is headquartered in China’s eastern Wuxi
City, is the sixth largest solar energy company in the world, with an annual battery output of
120 MW. Its products are mainly for export. Chongqing is a leading automobile- and
motorcycle-manufacturing base in China, which also is an important reason for Suntech’s plan to
build a battery production base in the city.

ZAP is using ABAT’s lithium-ion polymer batteries in its electric vehicles. Under the
first phase of a new agreement, ABAT will retrofit a range of ZAP EVs with its lithium-ion
polymer batteries and chargers. The initial testing shows that the ABAT batteries are increasing
the run time of ZAP’s vehicles by three times over that of lead-acid batteries. The threefold
 59

increase in energy density of the lithium polymer batteries could enable a similar threefold
increase in transportation range for comparable-weight batteries, enabling ZAP’s vehicles to
achieve a significantly increased driving range between electric recharges.

Degussa AG, Düsseldorf, is starting additional electrode production for large-volume

lithium-ion batteries at the Li-Tech GmbH (SK Group) site in Kamenz/Dresden. The first
expansion stage saw anode and cathode production come onstream in the fourth quarter of 2006.
Degussa has production capacities in China through the joint venture Degussa-ENAX (Anqiu)
Power Lion Co. Ltd. The German site is targeting large-volume energy storage applications, such
as batteries for hybrid vehicles. With its ceramic membrane, Separion®, the specialty chemicals
company had positioned itself at an early stage in the promising market for lithium-ion batteries.
According to Degussa, the global market for lithium-ion battery materials experienced double-
digit growth in 2004 and currently amounts to more than $1.2 billion. Degussa expects the
market volume to increase to around 4 billion by 2015.

Ultralife Batteries, Inc., has completed the acquisition of ABLE New Energy Co., Ltd.,
which is located in Shenzhen, China. Established in 2003, ABLE produces primarily Li-MnO2
and Li-SOCl2 batteries for a wide range of applications worldwide, including utility meters,
security systems, tire pressure sensors, medical devices, automotive electronics, and memory
backup, among many others.

3.5 GOVERNMENT POLICIES

The Government policies provide tax and investment incentives for the following areas of
advanced technologies research, development, and manufacturing:

Guidance on previously developed high-tech industrialized key fields: The National

Development and Reform Commission, Ministry of Science and Technology, Ministry of
Commerce of PRC, published Guidance on Prior-Developed High-Tech Industrialized Key
Fields in April 2004. This content is associated with the battery industry and includes new types
of batteries/power supplies such as lithium-ion cells and batteries, portable photovoltaic (PV)
power supply systems, and a new type of solar film battery. The federal government provides
additional incentives for the development of these technologies. This includes subsidies for
hiring recent graduates and some tax break.

Materials with special functions: This category includes energy conversion and energy
storage materials, including a hydrogen storage alloy and a hydrogen storage container, solar
batteries, high-performance rechargeable lithium batteries, and a new type of capacitor.

Fuel battery (fuel cell): Fuel cells use hydrogen or rich-hydrogen gas as fuel and oxygen
as oxidant; it converts chemical energy into electricity. This energy conversion is efficient and
environmentally friendly because almost no nitrogen oxide or sulfur oxide is discharged. The key
technologies included in the recent industrialization are battery materials; 1-kW–100-kW proton-
exchange membrane fuel cells and electrical catalysts; electrodes; Nafion-
 60

polytetrafluoroethylene compound films; bipolar plates; proton-exchange membrane fuel cells;

and direct-methanol, molten carbonate, and solid oxide fuel cells.

New energy and renewable energy: China possesses rich renewable energy resources.
Properly developed and promoted, renewable clean energy (such as bio-energy, wind energy,
solar energy, hydrogen energy, and geothermal energy) has great potential to reduce pollution
and improve China’s energy structure. Its recent industrialization plan also includes: biomass
gasification; electricity-generating and air-feeding technology; biomass liquid fuel technology;
design, manufacture, and production of a 750-kW wind-power generator set and related
components; a megawatt wind-power generator set and related components; high-efficiency,
low-cost solar PV cells; medium- and high-temperature solar-energy-generating equipment; a
ground-source heat pump; and a heating, air-conditioning, and hot-water combined supply
system.

3.5.1 Renewable Energy Law

On February 28, 2005, the Renewable Energy Law of the People’s Republic of China
was passed during the 14th session of the 10th National People’s Congress Standing Committee.
This law, effective as of January 1, 2006, will greatly promote the development and use of
renewable energy, the increase in energy supply options, the optimization of energy structure, the
energy security guarantees, and the environmental protection and sustainable development of
China. The Renewable Energy Law defines the term “renewable energy” as non-fossil energy
sources, which include wind, solar energy, hydropower, biomass, geothermal energy, and ocean
energy.

3.5.2 Government Plan

The rechargeable lithium-ion battery is a new and important technology in the energy
field and is strongly supported by the Chinese government. Since the initiation of China’s 863
Program in 1987, the Ministry of Science and Technology organized the research and
development of the key materials and technologies of the NiMH battery and lithium-ion battery
that shaped a large industrial-scale role for Chinese companies worldwide.

During the period of the 10th five-year-plan, China could realize the batch production
and industrialization of hybrid electric automobile and build power batteries and industrial bases
for related materials. Recently, the National Development and Reform Commission of China
decided to support the construction of a base from which to demonstrate the industrialization of
lithium-ion batteries to further promote the development of lithium-ion battery.

Compared with other countries, China still lacks the ability to update technology rapidly
and introduce innovations. The “973” Plan of the Ministry of Science and Technology has been
approved to promote the development of green technologies and accelerate the development of
the energy structures that are green and renewable. Establishing this green rechargeable battery
 61

technology program will emphasize innovative research in battery materials, new systems of
green rechargeable batteries, and related technologies.

3.5.3 Relevant Standards

The national standards of the battery industry are summarized in Table 15.

TABLE 15 Guobiao (GB) Standards of the Battery Industry

GB Number Title/Name

GB/T 2297-1989 Terminology for solar photovoltaic energy system

GB/T 2900.11-1988 Terminology of (secondary) cell or battery
GB/T 5008.1-1991 Lead-acid starter batteries — Technical conditions
GB/T 5008.2-1991 Lead-acid starter batteries — Varieties and specifications
GB/T 5008.3-1991 Lead-acid starter batteries — Dimension and marking of terminals
GB/T 6495.1-1996 Photovoltaic devices — Part 1: Measurement of photovoltaic current-voltage
characteristics
GB/T 6495.2-1996 Photovoltaic devices — Part 2: Requirements for reference solar cells
GB/T 6495.3-1996 Photovoltaic devices — Part 3: Measurement principles for terrestrial photovoltaic
(PV) solar devices with reference spectral irradiance data
GB/T 6495.4-1996 Procedures for temperature and irradiance corrections to measured I-V
characteristics of crystalline silicon photovoltaic devices, Battery Industry in China,
2005
GB/T 7169-1987 Designation of alkaline secondary cell
GB/T 7260-1987 Uninterruptible power systems
GB/T 7403.1-1996 Lead-acid traction batteries
GB/T 7403.2-1987 Lead-acid traction batteries — Product types and specifications
GB/T 7404-1987 Lead-acid batteries for diesel locomotives
GB/T 8897-1996 Primary batteries: General
GB/T 9368-1988 Nickel-cadmium alkaline secondary cells
GB/T 9369-1988 Nickel-cadmium alkaline secondary batteries
GB/T 10077-1988 Maximum outside size and capacity series for lithium batteries
GB/T 10978.2-1989 Lead-acid batteries for special type explosion-proof power unit in coal mines —
Product types and specifications
GB/T 11009-1989 Measuring methods of spectral response for solar cells
GB/T 11010-1989 Spectrum standard solar cell
GB/T 11011-1989 General rules for measurements of electrical characteristics of amorphous silicon
solar cells
GB/T 11013-1996 Alkaline secondary cells and batteries — Sealed nickel-cadmium cylindrical
rechargeable single cells
GB/T 12632-1990 General specification of single silicon solar cells
 62

TABLE 15 (Cont.)

GB Number Title/Name

GB/T 12637-1990 General specification for solar simulator

GB/T 12724-1991 General specification for silver-zinc rechargeable cells
GB/T 12725-1991 General specification for alkaline nickel-iron rechargeable batteries
GB/T 13281-1991 Lead-acid batteries used for passenger trains
GB/T 13337.1-1991 Stationary acid spray-proof lead-acid batteries — Technical conditions
GB/T 13337.2-1991 Stationary acid spray-proof lead-acid batteries — Capacity specifications and size
GB/T 13422-1992 Power semiconductor converters — Electrical test methods
GB/T 14008-1992 General specification for sea-use solar cell modules
GB/T 15100-1994 General specification for alkaline nickel-metal hydride cylindrical sealed
rechargeable batteries
GB/T 15142-1994 General specification for nickel-cadmium alkaline rechargeable single cells
GB/T 6495.5-1997 Photovoltaic devices — Part 5: Determination of the equivalent cell temperature of
photovoltaic (PV) devices by the open-circuit voltage method
GB/T 17571-1998 Alkaline secondary cells and sealed-nickel batteries — Cadmium rechargeable
monobloc batteries in button cell design
GB 8897.2-2005 Primary battery — Part 2: Sizes and technical conditions

A new battery standard, GB8897.2-2005, was issued in January 2005 and became
effective on August 1, 2005, replacing GB/T7112-1998. The original standards of the light
industry, QB/T528-1966, QB/T1186-1991, and QB/T1732-1993, were abolished at the same
time. In 2005, the product quality testing standard of the battery industry was changed to
GB8897.2-2005.

The Standardization Administration of China will draw new standards for cell-phone use
of lithium-ion battery to replace the existing ones. At the national standard coordination meeting
held in Qingdao in 2004, Aucma New Energy Company was chosen to take charge of the
development of new standards for lithium-ion batteries used in cell-phones. The draft work
started in July 2004, which clearly prescribes the capacity, cycling life-span, and safety of
batteries used in mobile phones.

3.5.4 Regulatory Steps to Promote Cleaner Transport

In the new Five-Year Plan (2006–2010), the Chinese government outlines steps to boost
efficiency and reduce pollution. A number of clear targets for increasing energy efficiency are
 63

set (e.g., to increase total energy efficiency by 20% and achieve an energy mix of at least 20%
renewable energy by 2020). The Chinese government also introduces clear policies:

• As of April 1, 2006, buyers of new, big cars paid 20% more in sales tax, and
buyers of smaller cars paid 1% less in sales tax.

• By the end of 2006, the parking fees in central Beijing doubled.

• During 2006, the price of gasoline for end consumers increased by about 20%
(because older subsidies had been lifted).

• Starting December 2005, tighter vehicle standards were approved.

3.5.5 Example of Income Taxes and Incentives

Under applicable income tax laws and regulations, an enterprise ABC (not a real name of
a company) located in Shenzhen, including the district in which operations are located, is subject
to a 15% enterprise income tax. Further, according to PRC laws and regulations, foreign-invested
manufacturing enterprises are entitled to, starting from their first profitable year, a two-year
exemption from enterprise income tax, followed by a three-year 50% reduction in the enterprise
income tax rate. The PRC subsidiaries are entitled to a two-year exemption from enterprise
income tax and a reduced enterprise income tax rate of 7.5% for the three years following the
first profitable year. As such, for the first two calendar years, ABC enterprise was exempted
from any income tax. For the following two years, this enterprise is subject to the income tax rate
of 7.5%. Some preferential tax treatment is also applicable to this enterprise, and the enterprise is
fully exempt from any income tax during a tax holiday. (A tax holiday is a designated period —
the month of June each year — during which companies do not pay income tax on equipment
purchases or any other incurred business expenses.)

In addition, due to the additional capital invested in the ABC enterprise, it was granted a
lower income tax rate of 1.7% for two years. Furthermore, to encourage foreign investors to
introduce advanced technologies in China, the government of the PRC has offered additional tax
incentives to enterprises that are classified as a foreign-invested enterprise with advanced
technologies. If the enterprise qualifies for this designation, then it pays 1.7% in taxes for an
additional three years. It can then renew this status and pay low income taxes. As a result, as
long as ABC maintains this designation, it may apply to the tax authority to extend its current
reduced tax rate of 1.7% for another three years.

3.6 GOVERNMENT POLICIES AND HEV STANDARDS

The HEV-pro policy has been clearly included in the new China Auto Industry Policy.
The R&D and industrialization of HEVs have been listed as a major component of government
 64

funding for technology development in China. Also, the related HEV standards will be
recommended and adopted by auto makers in China:

• Test methods for energy consumption of light-duty hybrid EVs

• Measurement methods for emissions from light-duty hybrid vehicles

• Program for approving the engineering evaluation of HEVs

• Programs for testing the comprehensive performance of HEVs

• Safety specifications for HEVs

• Method for testing the power performance of HEVs

• Technical specifications of the motor and controller for EVs

• Method for testing the motor and controller for EVs

 65

4 SUMMARY AND RECOMMENDATIONS

The lithium-ion battery offers very high power on charge and discharge and further
improvements — desirably in power at low temperature — may be possible. The main challenge
for this technology — besides cost reduction — is to achieve acceptable operating life,
particularly at 40°C. Battery companies, as well as R&D organizations worldwide, are making
major efforts to mitigate the relatively rapid fading of the LiMn2O4 lithium-ion battery at
elevated temperatures. However, the degree of improvement that will be achieved is difficult to
anticipate.

The basic chemistry and design of lithium-ion HEV cells are quite similar to those of
small consumer cells, which suggests that the basic manufacturing processes for HEV batteries
should be well understood. The manufacture of lithium-ion cells is known to require a higher
level of process control and precision than most other types of battery manufacturing, and, as a
result, scrap rates tend to be higher. Most, if not all, producers of small lithium-ion batteries have
experienced product recalls and/or production shutdowns as result of reliability issues and/or
safety incidents. Extrapolating this experience to the much larger HEV cell with thinner
electrodes, it seems likely that scaling up the production of HEV cells from the current early
pilot level will be slow and costly. If lithium-ion HEV batteries are to become commercially
viable, operating life and abuse tolerance issues will need to be resolved first, and then the unit
cost of the technology will need to be reduced, at least to the levels projected for NiMH batteries.

Because the 2008 Olympics will be held in Beijing, the Chinese government designated
lithium-ion battery technology as a strategic technology for the development and manufacturing
of portable and vehicular applications. As a result of this designation, foreign companies were
attracted to work with Chinese companies to form joint ventures and/or partnerships, since the
potential size of Chinese markets for portable electronics and vehicular applications is
significant.

The following recommendations are made:

1. A DOE Program Official(s), along with experts, should visit China to study its
battery technology industry firsthand and to make arrangements for
benchmarking Chinese battery technology in the United States. Chinese
companies have expressed a strong interest in making battery technology
available for benchmarking. The timing is right, and interest in working with
the United States is very strong.

2. The DOE and the Tianjin Institute of Power Sources should work together to
set up a battery workshop in China and invite U.S. industry to participate. This
effort will help the U.S. industry to work with its counterparts to more rapidly
develop advanced, reliable, low-cost lithium-ion batteries.
 66

3. The Chinese universities and institutions have shown broad interest in

cooperation. DOE should pursue such cooperation as a way to learn more
about Chinese battery technology.

4. CITIC Guoan MGL; MGL New Energy Technology Co., Ltd.; Green Power
Co.; Tianjin Lintian Double-Cycle Tech. Co.; Suzhou Phylion Battery Co.,
Ltd.; Tianjin Lishen Battery Joint-Stock Co., Ltd.; and Tongji University have
expressed interest in having their staff do postdoctoral fellowships in the
United States. This is an opportunity for national laboratories and the industry
to build stronger relationships with Chinese companies and institutions.
 67

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 70

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Technology Development Zone
#450 Luoyu Rd. Wuhan
CN, Hubei 430079
China
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6/F, Chuangye Mansion
East Software Park, 99 Huaxing Road
Hangzhou 310012, China
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Battery University
Cadex Electronics
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www.chinaev.com.cn

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http://www1.cei.gov.cn/ce/e_report/hy/ddc.htm

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 71

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 73

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 74

APPENDIX A: ORGANIZATIONS REPRESENTED IN INTERVIEWS

LITHIUM-ION BATTERY COMPANIES AND INSTITUTIONS IN CHINA

1. Dr. Tian Guangyu, Professor

Tsinghua University
Department of Automotive Engineering
Beijing, 100084

2. Dr. Lin Chengtao, Professor

Tsinghua University
Department of Automotive Engineering
Beijing, 100084

3. Mr. Wei Feng, Manager

Division of International Cooperation & Trade Promotion
China Electrotechnical Society
Beijing 100823

4. Dr. Sun, Li, Secretary General

Chinese Electrotechnical Society Electric Vehicle Institution
North China University of Technology
Beijing 100041

5. Dr. Liqing Sun, Professor

School of Mechanical Engineering & Vehicular Engineering
Deputy Secretary General, Special Committee of Electric Vehicles
China Electrotechnical Society
Beijing 100081

6. Dr. Zhou Sigang, Professor

China Electrotechnical Society
Executive Deputy Secretary General
Beijing 100823

7. Li Yongwei, Administrative Vice Director

Research Institute
CITIC Guoan MGL
MGL New Energy Technology Co., Ltd.
Beijing 102200
 75

8. Wu Ningning, Vice Director

Research Institute
CITIC Guoan MGL
MGL New Energy Technology Co., Ltd.
Beijing 102200

9. Yuan Chun Huai

Beijing Green Power Technology Co., Ltd.
Beijing100086

10. Dr. Wang Haoran

Beijing Green Power Technology Co., Ltd.
Beijing100086

11. Dr. Zhang Bao Wen, Senior Researcher

Beijing Green Power Technology Co., Ltd.
Beijing100086

12. Dr. Wang Ji Qiang, Vice Chief Engineer and Professor

Tianjin Institute of Power Sources
Tianjin 300381

13. Ms. Yu Bing, Engineer/Object Manager

Testing Center of Chemical & Physical Power Sources
Ministry of Information Industry
Testing Center of Electric Vehicle Battery of National 863 Project
Tianjin 300381

14. Dr. Xu Gang, Vice-President

Tianjin Lishen Battery Joint-Stock Co., Ltd.
Tianjin 300384

15. Wang Guo Ji, Vice Manager

Tianjin Lantian Double-Cycle Tech. Co., Ltd.
Tianjin 300384

16. Zhao Chunming, Master Senior Engineer

China Automotive Technology & Research Center
Tianjin 300162

17. Dr. Wu Xiao Dong, Tech. Dept. Manager

Suzhou Phylion Battery Co., Ltd.
Jiangsu 215011
 76

18. Dr. Zhang Lu, Tech. Dept. Testing Center

Suzhou Phylion Battery Co., Ltd.
Jiangsu 215011

19. Xuezhe Wei, Professor

School of Automobile Engineering
Tongji University
Shanghai FCV Powertrain Co., Ltd.
Shanghai 201804

20. Wei Yang

School of Automobile Engineering
Tongji University
Shanghai FCV Powertrain Co., Ltd.
Shanghai 201804

21. Dr. Zhang Xiangjun, Director

General Research Institute for Nonferrous Metals
Institute of Energy Materials and Technology Lab of Li-ion Battery
Beijing 100088

22. Jin Wei Hua, Senior Engineer

General Research Institute for Nonferrous Metals
Division of Mineral Resources, Metallurgy & Materials
Beijing 100088

23. Wu Guoliang, Vice General Manager

Weifang Jade Bird Huanguang Battery Co., Ltd.
Weifang, Shandong 261031

24. Dr. Zhang Jun, Professor

Beijing Institute of Technology
BTI EV Center of Engineering and Technology
Beijing 100081

25. Dr. He Hong-Wen, Professor

Beijing Institute of Technology
BTI EV Center of Engineering and Technology
Beijing 100081

26. Dr. Wang Zhen-po, Professor

Beijing Institute of Technology
BTI EV Center of Engineering and Technology
Beijing 100081
 77

27. Jinhua Zhang, Vice President

China Automotive Technology & Research Center
Beijing 100070

28. Hou Fushen, Director

Hi-tech Development Department
China Automotive Technology & Research Center
Beijing 100070
 78

APPENDIX B: LITHIUM-ION BATTERY TECHNOLOGY PRESENTATION

B.1 CURRENT STATUS: HEV BATTERIES

‰ Conventional lithium-ion batteries for HEVs appear about ready for commercialization.
‰ Major focus remains on cost reduction.
‰ Low-temperature performance and abuse tolerance still remain issues.
‰ Emerging technologies with nanostructure materials (Li4Ti5O12 or
LiFePO4) appear to address these issues.
‰ Batteries, even those incorporating “stable” materials, will require appropriate
thermal management controls and electronic protection circuits to extend battery
life and avoid thermal runaway.
‰ Battery life projections of 10–15 years are based on limited data.

B.2 LITHIUM-ION BATTERY TECHNOLOGY

Advantages Disadvantages

Highest Energy Storage Relatively Expensive

Light Weight Electronic Protection Circuitry
No Memory Effect Thermal Runaway Concern
Good Cycle Life 3-h Charge
High Energy Efficiency Not Tolerant of Overcharge
High Unit Cell Voltage Not Tolerant of Overcharge or Over-
Discharge

B.3 MICROSUN’S LITHIUM-ION BATTERY

High-Power Lithium-Ion Battery Design

• Cell Specifications:
– Commercially Available Type HPPC 18650 (high power)
– Cutoff Voltage: 3.0 to 4.2 V
– Cell Rated Capacity: 1.6 A•h
– Maximum Discharge: 20 A
– Maximum Charge: 5 A (80% in < 15 min)
– Cycle Life: >1,000 (80% charge)
• Module Specifications:
– Module Design: 4 series × 5 parallel
– Nominal Voltage: 14.4 V
– Module Capacity: 8 A•h
– Maximum Discharge: 50 A continuous, 100 A of 10-s pulses
 79

– Charge Time: < 1 h (80%)

– Fully integrated cell balancing, safety circuit, and thermal management
– Dimensions: 4.30 in. × 5.30 in. × 2.75 in.

B.4 GOLD PEAK INDUSTRIES NORTH AMERICA

18650 at 2,650 mA·h and 42.5 g – 230 Wh/kg, 0.67 amp/cell (3 parallel)

Both High-Capacity Versions

Parameter LiSO2 Primary Lithium-Ion

A 20 67
A•h 8.25 2.65
V 2.72 3.67
Cells 1.00 1.00
Wh 22.44 9.73
Kg 0.0850 0.0421
Wh 264 231

B.5 A 123 26650 LITHIUM-ION SPECIFICATIONS

Capacity 2.3 A·h

Energy 7.6 Wh (110 Wh/kg)

Nominal voltage 3.3 V
Cylindrical cell dimensions 25.9 mm dia, 65.4 mm H
Cell volume 34.45 cm3
Cell mass (without external tabs) 70 g
Impedance (1 kHz) 8 MΩ
Impedance (10 A, 10 s) 15 MΩ
Temperature range −30°C to 60°C

B.6 KOKAM AMERICA

• Fast charge capability: max. 3°C

• High discharge capability: 10 ~ 20°C
• High power density: over 1,800 W/kg (high power cell)
• Longer cycle life: over 2,500 cycles @80% DOD
• Wide operating temperature: -30 ~ 60°C
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• Environmental friendly: zero emissions

• Low energy consumption: lightweight
• Maintenance-free operation
• Low heat emission in high-discharging mode

Parameter Power Cell Energy Cell

Energy Density
Wh/kg 120 200
Wh/I 240 400

Power Density
W/kg 2,400 550
W/I 4,800 900

B.7 ELECTRO ENERGY, MOBILE PRODUCTS, INC.,

BI-POLAR LITHIUM-ION BATTERY TECHNOLOGY

• LiCoO2 chemistry
• Cell capacity: 20 A•h
• Cell is capable of 5°C charge and discharge
• 8 stacks of cells, total number of cells is 112
• Total capacity: 160 A•h
• System energy: 8 kWh
• Cell weight: 100 lb
• Additional battery hardware weight (5–10 lb) will be required

B.8 SAFT HIGH-POWER LITHIUM-ION CELLS

(VL20P)

• Nominal voltage: 3.6 V

• Average capacity: 20 A•h, 1°C after charge to 4.0 V/cell
• Minimum capacity: 18.5 A•h, 1°C after charge to 4.0 V/cell
• Specific energy: 187 Wh/kg
• Specific power: 1,811 W/kg
• Cell diameter: 41 mm
• Cell height: 145 mm
• Typical cell weight: 0.8 kg
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B.9 HIGH-POWER TOYOTA 12-A·H CELL

LITHIUM-ION BATTERY

• Voltage: 3.6 V
• Capacity: 12 A•h
• Specific power: 2,250 W/kg
• Specific energy: 74 Wh/kg
• Weight: 580 g
• Dimensions: 120 mm (L), 25 mm (W), 120 mm (H)

B.10 CURRENT STATUS: TECHNOLOGY CHARACTERISTICS

B.11 CHALLENGES FOR LITHIUM-ION LARGE BATTERY DEVELOPMENT

• Abuse tolerance – material and battery management

• Cost: cathode selection, volume, standardization, packaging, battery

management

• Life: cathode selection, operating temperature, packaging

• Performance in extreme temperatures — all aspects of chemistry

 82

B.12 LITHIUM-ION BATTERY STATUS VS. GOALS FOR POWER-ASSIST HEV

B.13 ELECTRIC AND HYBRID VEHICLE BATTERY REQUIREMENTS

(MODULE BASIS)

Requirement Parameters HEV PHEV-20 PHEV-60

Vehicle ZEV Range (mi) 0 20 60

Battery Capacity (kWh) <3 6 18
Cell Size (range corresponds to 5–10 15–30 45–90
battery voltage 400V to 200V)
Specific Energy (Wh/kg) >30 ~50 ~70
Specific Power (W/Kg) ~1000 ~440 ~390
Cycle Life
Deep (80% DOD) n.a. >2,500 >1,500
Shallow (+/- 100 Wh) 200k 200k 200k
 83

B.14 BATTERY REQUIREMENTS FOR TRANSPORTATION

B.15 ADVANCED BATTERY TECHNOLOGIES DEVELOPMENT STATUS

 84

APPENDIX C: INTERVIEW QUESTIONS AND DISCUSSION TOPICS

The following questions were submitted to organizations developing lithium-ion batteries

for discussions two weeks before meetings in the PRC.

1. Battery technology status: What is the level of development? Cell, module, or

full pack?

2. Battery technology applications, power, energy, volume, and weight?

3. Testing methodology used? Charge/discharge limitations, cycle life, capacity,

voltage, temperature operating range, and effect of aging?

4. Number of units produced per year, manufacturing facilities, and equipment

used?

5. Any special feature(s) available on your current products?

6. Raw material availability domestically as well imported?

7. Where are your batteries sold? Domestically or exported? Are you working
with any other companies overseas or domestically? How many batteries are
produced for domestic use and for export purpose?

8. What is the cost of your battery domestically and overseas?

9. Is your battery cell, module, or pack available for testing and evaluation if we
can work out a confidentiality agreement? Could we evaluate your technology
at Argonne National Laboratory in the United States? When can you make the
battery available for evaluation?

10. Are you conducting R&D at your facilities or with companies in China or
overseas to improve your products or developing new products or technology?
In general, what is the nature of your agreement? Is your company
participating in joint venture or equity partnership?

11. Currently, are you working on batteries for electrical, hybrid, and/or plug-in
hybrid vehicles?

12. Are you interested in pursuing battery development for electric, hybrid, and/or
plug-in hybrid vehicles?

13. What is your company size? How many employees do you have? What are
your sales per year (kW·h of capacity sold, or value sold in Yuan)?
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14. Do you sell batteries directly as retail products? Do you sell batteries to other
companies that convert them into packs with controllers? Is quality control
causing you problems in selling batteries to some potential customers?

15. What are the incentives are offered by the Chinese Government to battery
developers? Are these same incentives available to both domestic and/or
international companies working with Chinese companies?

16. Do you have intellectual property, such as patents, joint venture agreements,
or other rights to protect your products? How important are these for new
product vs. improvement, venture vs. current manufacturer? Do you purchase
battery technology and specialize only in production, or do you invest in
battery R&D to develop your own products? If you do your own R&D, how
much do you spend per year?
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APPENDIX D: CHINESE LITHIUM-ION BATTERY DEVELOPMENT COMPANIES,

CONTACTS, UNIVERSITIES, AND OTHER ORGANIZATIONS

LIST A

1. Beijing Waterwood Technologies Co., Ltd.

2. Topin Battery (China), Ltd.
3. Shenzhen Suppower Tech. Co., Ltd.
4. Shun Wo New Power Battery Technology, Ltd.
5. Sero Industrial & Commercial Co., Ltd.
6. Zhongyin (Ningbo) Battery Co., Ltd.
7. Shenzhen Win-top Electronic Tech. Co., Ltd.
8. Fujian Nanping Nanfu Battery Co., Ltd.
9. Hecell Hangzhou Battery Co., Ltd.
10. Shenzhen Mallerf Tech. Co., Ltd.
11. Hong Kong Eastar Industrial Co., Ltd.
12. Power Tech International Co., Ltd.
13. XELLEX Battery & Power Supply Tech. Co., Ltd.
14. Shenzhen Shunyi Industrial Co., Ltd.
15. GBP Battery Co., Ltd.
16. CLEScell International Battery Co., Ltd.
17. Wuhan Lixing (Torch) Power Sources Co., Ltd.
18. Sunhigh Battery(Primary Lithium) Co., Ltd.
19. Guangzhou Markyn Battery Co., Ltd.
20. Minamoto Battery Company
21. Golden Battery Technology Co., Ltd.
22. Wama Battery Co., Ltd.
23. Clescell International Battery Co., Ltd.
24. Able Battery Co., Ltd.
25. Guangzhou Great Power Battery Co., Ltd.
26. Narada Licom Power Tech. (Shanghai) Co., Ltd.
27. Megalink Company
28. Shenzhen Fekko Industrial Co., Ltd.
29. Totex International Limited
30. Hmc Power Technology, Ltd.
31. Tin Kam Company Limited
32. Shenzhen HJXY Li-Ion Battery Factory
33. Shenzhen Caixing Battery Factory
34. Hangzhou Lanbei Electric Bicycle Co., Ltd.
35. Jinhua Shiwei Vehicle Co., Ltd.
36. Hyper Power Co., Ltd.
37. Desay Power Technology Co., Ltd.
38. Yuntong Power Co., Ltd.
39. Huaye New-Technology Industry Co., Ltd.
40. Huangyuda
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41. Huangyuda LTD Company

42. Zhongshan Mingji Battery Co., Ltd.
43. Hangzhou Huitong Industry Co., Ltd.

LIST B

1. Tianjin Lantian Double-Cycle Tech. Co., Ltd.

2. Tianjin Lishen Battery Joint-Stock Co., Ltd.
3. Beijing Green Power Tech Co., Ltd.
4. Beijing MGL
5. Shenzhen BAK Battery Co., Ltd.
6. Advanced Battery Technology, Inc., Ltd.
7. Hunan Corun Hitech Co., Ltd.
8. Degussa – ENAX (Anqui) Power Lion Co., Ltd.
9. Shenzhen Win – Top Electronic Tech. Co., Ltd.
10. Hecell Hangzhon Battery Co., Ltd.
11. Power Tech International Co., Ltd.
12. GBP Battery Co., Ltd.
13. CLEScell International Battery Co., Ltd.
14. Guangzhou Markyn Battery Co., Ltd.
15. Golden Battery Technology Co., Ltd.
16. Guangzhou Great Power Battery Co., Ltd.
17. Narada LiCom Power Tech (Shanghai) Co., Ltd.
18. Totex International, Ltd.
19. Hmc Power Technology, Ltd.
20. Shenzhen HJXY Li-Ion Battery Factory
21. Shenzhen Caixing Battery Factory
22. Hangzhou Lanbei Electric Bicycle Co., Ltd.
23. Jinhua Shiwei Vehicle Co., Ltd.
24. Hyper Power Co., Ltd.
25. Yuntong Power Co., Ltd.
26. Huangyuda
27. Wuhan Lixing (torch) Power Co., Ltd.

Institution and University Contacts:

1. Heliang Zhou, China Electro-Chemical Society, Beijing

2. Wang Tiqiang, Battery Technology Institute
3. Chen Quanshi and Dr. Jiang Fachao, Tsinghua University
4. Dr. Prof. Sun Fengchun, Beijing Institute of Technology
5. Prof. C.C. Chan, University of Hong Kong
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LIST C

1. Tianjin Lantian Double-Cycle Tech. Co., Ltd.

2. Tianjin Lishen Battery Joint-Stock Co., Ltd.
3. Beijing Green Power Tech. Co., Ltd.
4. CITIC Guoan MGL
5. Suzhou Phylion Battery Co., Ltd.
6. General Research Institute for Nonferrous Metals (GRINM), Institute of Energy
Materials and Technology Laboratory of Li-ion Battery

Institutions and Universities:

1. China Electrotechnical Society, Beijing

2. Tsinghua University
3. Tianjin Institute of Power Sources
4. Tongji University
5. Beijing Institute of Technology
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