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Prices for Lithium Batteries on the Rise

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Next to the prices for e-bike motors also the prices for Li-Ion batteries are on the up and up. As of July 1, 2011, FMC (US) and Chemetal (Germany) jointly raised the price for Lithium Carbonate by 20%. The price of the downstream products, including Lithium Hydroxide, Lithium Chloride, Lithium Salt and materials for Li-Ion Battery also

Prices for Lithium Batteries on the Rise

AMSTERDAM, the Netherlands – Next to the prices for e-bike motors (see Bike Europe’s last week report) also the prices for Li-Ion batteries are on the up and up. As of July 1, 2011, FMC (US) and Chemetal (Germany) jointly raised the price for Lithium Carbonate by 20%. The price of the downstream products, including Lithium Hydroxide, Lithium Chloride, Lithium Salt and materials for Li-Ion Battery also increased by 15% to 25%.

These developments are expected to cause the price of Li-Ion batteries to rise, posing a daunting challenge for the e-bike companies in China who want to expand their Li-Ion product lines.

Since May 2011, the Chinese government has started to forbid the production of lead-acid batteries nationwide, causing a supply shortage of lead-acid batteries and subsequent price increase. The big majority of the millions of e-bikes sold every year in China are equipped with lead-acid batteries. The turn to Li-Ion batteries will drive up demand and with that also prices.

“The price increase will bring closer the wide price gap between (the) PB battery and Li-ion battery, and therefore create an opportunity for the growth of Li-ion batteries,” commented Ma Zhongchao, Chairman of China Bicycle Association. “However, as the price of Li-ion battery goes up, it will become more difficult to popularize Li-ion e-bikes.”

As e-bikes are a low-margin industry in China, the price increase of Li-ion batteries will make it harder for e-bike manufacturers to alleviate cost pressure. Ma hopes that the Chinese government can support the popularization of Li-ion e-bikes by increasing subsidies to e-bike manufacturers. “I hope that within 3 years, the market share of Li-ion e-bikes will grow to 15% in China,” he says.

 

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