China's BYD launches world's biggest battery factory

FILE PHOTO - A man walks past a BYD store in Wuhan, Hubei province, March 20, 2014. REUTERS/Stringer

SHANGHAI (Reuters) - Chinese electric carmaker BYD Co Ltd has opened a new lithium battery plant in the northwestern province of Qinghai, which will be the world’s biggest when construction is fully completed next year, it said on Thursday.

The factory, BYD’s third, can eventually produce 24 gigawatt-hours of batteries a year, and is part of the company’s plans to raise its total production capacity to 60 GWh by 2020, it said in a statement.

BYD is building new battery production capacity to take advantage of China’s aggressive new energy vehicle (NEV) push, with the country desperate not only to cut air pollution from traditional combustion engines but also boost its high-tech clout.

BYD Chairman Wang Chuanfu told reporters last year that he expected all vehicles in China to be electrified by 2030.

NEV manufacturers sold 328,000 units in the first five months of this year, up 141.6 percent from a year earlier. NEV ownership in China accounted for more than half the global total last year.

The government is already warning of overcapacity risks, with a state planning agency official saying earlier this month that there were signs of “blind development” in the sector.

Reporting by David Stanway; Editing by Subhranshu Sahu