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China BAK Battery, Inc. (CBAK) Experiences Surge in Demand for Li-ion Battery Cells, Driven by Popularity of Electric Bike’s and Governmental Crack Down on Pollutive Lead-Acid Battery Manufacturing

China BAK Battery, one of the top global manufacturers of lithium-based battery cells, the primary component in the Li-ion (lithium-ion) batteries which power the vast majority of today’s portable electronic devices, reported a surge in demand for the Company’s e-bike battery business at its facility in Tianjin, attributing the surge to the recent suspension of lead-acid battery manufacturing by the Chinese government.

CEO of CBAK, Ke Marcus Cui, called the combination of the Company’s reputation for high-quality Li-ion battery cells and the government’s support of the Li-ion industry in general a huge boon for CBAK, projecting that e-bike battery sales will only increase in future.

Projected orders for the Company’s next quarter (ending Sept. 30) from e-bike manufacturers is expected to jump by 88% nearly doubling CBAK’s 10,600 battery packs figure for the current quarter. The Company is also anticipating a spate of new customers from within the traditional lead-acid industry as well, as manufacturers retool in order to compete.

Data from Reuters indicates that some 20% of the 3.7M tonnes of refined lead produced in China was consumed by the e-bike industry in 2010, as production of e-bikes exceeded 17M, spurred on by the government’s attack on heavy metal pollution. CBAK projects that as little as a 10% replacement rate in e-bike batteries with Li-ion will generate a huge amount of business for the Company.

With over 300 lead-acid battery manufacturers in Zhejiang Province, the unsafely high levels of lead in people’s blood in the region was a major contributing factor to the governmental crack down on heavy metal polluters and thus several of the top manufacturers of lead-acid in Zhejiang have suspended production. The Chinese Ministries of Public Security, Industry and IT have joined with the State Administration for Industry & Commerce and the General Administration of Quality Supervision, Inspection and Quarantine in forcing requirements onto local industry, commerce offices and police to ensure that e-bike manufacturing plants which pollute are reigned in.

Among the stipulations for e-bikes are a 40 kg weight limit and 20 km/hr (12.4 mph) speed limit, making e-bikes the perfect candidate for the much lighter Li-ion batteries (avg. battery weight is 4 kg) which are roughly 1/4th the weight without decreased performance, capacity or battery life. Indeed, Li-ion batteries manufactured by CBAK have an extremely light environmental impact and a much longer life-cycle compared with lead-acid, meeting in addition, all governmental requirements.

Top battery manufacturers XDS Shenzhen Xidesheng Bicycle Co., Ltd., Geoby Electric Vehicle Co., Ltd. and NOAHtek Electric Bicycles Company, have all gone into talks with CBAK to obtain future supplies amid the rising demand, ensuring that this upswing has real meat on its bones.

With some 3m sq ft of facilities in Shenzhen and Tianjin, CBAK is constantly growing and recently expanded its production footprint to accommodate production aimed at larger batteries for various types of vehicles, insanely well-timed move as the global market for Li-ion vehicles is ramping up towards a massive boom.

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