On October 23, Securities Daily, a financial newspaper affiliated with China’s state-run Economic Daily, published an article examining how Chinese lithium battery companies are changing their approach to overseas markets.
What makes the piece interesting to me is that it looks beyond China’s battery exports to show how companies in one of the country’s internationally competitive manufacturing industries are building their businesses abroad. Through examples of investments in Europe, the United States and Southeast Asia, it illustrates a shift toward local manufacturing, coordinated supply chains and battery recycling systems.
The article also offers a useful perspective on how Chinese companies are thinking about the relationship between commercial interests and long-term, sustainable growth in overseas markets.
I see a connection between this report and a recent essay by Chinese economist Keyu Jin in TIME, titled “China Cannot Remain the World’s Factory. What Comes Next?“ Published on the same day, Jin’s essay argues that China’s future role in the global economy may increasingly involve exporting industrial and technological capabilities, rather than simply manufactured products. The lithium battery industry provides some concrete examples of how such a shift is taking shape.
Another perspective came a day later from Cheng Yawen, a professor at the School of International Relations and Public Affairs at Shanghai International Studies University. In a commentary, Cheng discussed the restrictions Chinese companies face in Western markets while also warning of two longer-term risks associated with overseas expansion: the potential weakening of China’s domestic industrial base through the relocation of production and supply chains, and resistance from host countries if Chinese companies fail to adequately address local interests.
Cheng acknowledged that Chinese investment has contributed to development in many countries and received positive feedback, but argued that negative reactions should not be overlooked. He suggested that Chinese companies still have much to learn about expanding internationally in ways that benefit both their home economy and the countries where they operate.
These questions have also come up in my recent conversations with scholars and investors in Asia and Europe, and I’ve been struck by the different ways people approach them.
One European scholar questioned whether Chinese companies building factories in Europe would be enough to ease industrial tensions, given that European manufacturers still need to survive and develop their own capabilities.
In conversations with investors in Asia, I heard a different concern: expanding overseas could expose Chinese companies, and potentially China itself, to new vulnerabilities that foreign governments might exploit. Meanwhile, a Chinese scholar offered another perspective, arguing that deeper economic ties between China and the rest of the world could give both sides stronger incentives to avoid conflict.
These conversations have reminded me how complicated the issue is, and how much can be missed when we look at it through a single lens. I think greater localization of Chinese manufacturing overseas is a path worth exploring, but it also raises difficult questions about China’s domestic industries and how businesses and workers in host countries can adapt to the changing industrial landscape.
The Securities Daily report offers a concrete look at how Chinese battery companies are approaching this process. While it focuses mainly on the perspectives of Chinese companies and industry analysts rather than those of host countries, I think the examples are worth examining.
Below is the translation of the article, originally written by Li Wenshan and published in Securities Daily on October 23, 2026. All links and videos were added by me.
From Selling Products to Building an Ecosystem: China’s Lithium Battery Industry Explores New Paths Overseas
By Li Wenshan | Securities Daily
A recently released 15th Five-Year Plan for the Development of the New-Type Battery Industry, jointly issued by China’s Ministry of Industry and Information Technology and six other government departments, calls for guiding enterprises to expand overseas in an orderly manner.
The plan emphasizes the need to strengthen analysis of global new energy market demand and the geopolitical environment, make coordinated use of domestic and international markets and resources, and guide enterprises in pursuing diversified and orderly overseas investment. It also calls for improving risk prevention and emergency response mechanisms to better protect enterprises operating abroad.
As one of China’s “New Trio“ major export products, alongside electric passenger vehicles and solar cells, lithium batteries have continued to record strong export growth, while listed companies across the battery supply chain are accelerating overseas projects.
The industry’s international expansion is gradually moving beyond the traditional model of shipping finished products overseas. New approaches include establishing local factories, developing industrial clusters and building ecosystems covering the entire battery life cycle.
Amid these overlapping developments, overseas expansion has evolved from an option for companies seeking new markets into an increasingly necessary part of the industry’s long-term sustainable development.
Putting Down Roots in Local Markets
According to the latest data released by the China Automotive Power Battery Industry Innovation Alliance, China’s combined exports of power and energy storage batteries reached 302.9 GWh in the first nine months of 2026, up 51.6 percent year on year and accounting for 18 percent of cumulative sales.
Of the total, power battery exports reached 199.7 GWh, accounting for 65.9 percent and rising 54.7 percent year on year. Energy storage battery exports reached 103.2 GWh, accounting for 34.1 percent and increasing 45.9 percent.
Behind these strong export figures lies a shift in the overseas expansion strategies of lithium battery companies.
Rather than relying solely on finished-product exports to enter foreign markets, companies are accelerating the development of overseas production capacity, making a strategic transition from selling products to manufacturing locally and establishing a more lasting presence in host markets.
Leading lithium battery manufacturers are at the forefront of this transition.
On September 22, Chinese battery giant Contemporary Amperex Technology Co., Limited (CATL) officially began trial production of battery cells at its factory in Debrecen, Hungary. The facility is the largest overseas production base established by a Chinese lithium battery company.
The start of cell production marks an upgrade in CATL’s European manufacturing capabilities, from assembling battery modules to producing battery cells locally. The development complements the company’s overseas production footprint in countries including Germany, Spain and Indonesia.
Hithium Energy Storage, based in Xiamen, has also made progress in establishing overseas manufacturing operations.
Its first overseas factory, located in Mesquite, Texas, has a planned annual production capacity of 10 GWh for battery modules and systems and has entered the stage of mass production and commercial deliveries.
Meanwhile, Hithium’s manufacturing base in Navarra, Spain, remains under construction. The first phase involves an investment of approximately 400 million euros and is expected to begin production by the end of 2027.
“Overseas expansion is a process of continuous deepening,” Wang Pengcheng, president of Hithium, told Securities Daily.
“Against the backdrop of an accelerating global energy transition, Hithium remains committed to a globalization strategy that recognizes the importance of both a stable domestic base and a strong international presence. We will continue to pursue a differentiated, localized and integrated approach to overseas development to strengthen our competitiveness in global markets.”
Beyond Europe, Chinese battery companies are also developing localized production lines in Southeast Asia.
Companies including EVE Energy, Sunwoda Electronic and Guangdong Greenway Technology are pursuing projects in the region. Some involve jointly establishing battery pack assembly facilities or cell factories with local automakers and energy companies, while others involve building independently owned battery manufacturing bases.
“Overseas markets are placing increasingly high demands on localized manufacturing,” Feng Yongqi, an analyst covering high-end equipment manufacturing at Wanlian Securities, told Securities Daily.
“Leading lithium battery companies need to establish local manufacturing capabilities in major consumer markets to get closer to customers, better understand local standards and accumulate technological expertise.”
Feng added that global manufacturing capacity can also help companies achieve economies of scale and spread research, development and manufacturing costs over a larger production base.
This can create a positive cycle of “economies of scale, technological iteration and cost optimization,” helping companies build lasting competitive advantages in global markets.
Building a Coordinated Industrial Ecosystem
If establishing local factories is the main direction of lithium battery companies’ overseas expansion, the accompanying investments by upstream and downstream suppliers mark a new stage in which entire industry clusters are moving abroad.
According to data from Wind, 13 listed Chinese companies across the lithium battery supply chain, including EVE Energy, Shenzhen Capchem Technology and Yunnan Energy New Material, have established production operations or invested in factories in Malaysia, with combined investment exceeding 25 billion yuan.
These companies cover key parts of the battery supply chain, including cathode materials, anode materials, separators and electrolytes.
Thailand, which has Southeast Asia’s most developed automotive manufacturing industry, has also attracted investment from numerous Chinese lithium battery supply chain companies.
Their operations are centered on battery manufacturing but extend to cathode materials, components and structural parts, creating industrial coordination across vehicle manufacturing, battery production, battery pack assembly and component manufacturing.
For example, Sunwoda has invested approximately 740 million U.S. dollars in two phases of lithium battery factory projects in Thailand. The facilities will produce power and energy storage batteries for Southeast Asian and global markets.
BYD has already begun operations at its vehicle manufacturing plant in Thailand, which has an annual production capacity of 150,000 vehicles. The company has also developed supporting battery production lines.
As a result, BYD’s operations in Thailand extend beyond vehicle assembly to include power battery manufacturing, improving the efficiency of localized production.
There are two main considerations behind the decision of supply chain companies to follow battery manufacturers overseas.
First, they can secure orders from overseas battery customers and establish an early presence in Southeast Asian and global markets for power and energy storage batteries.
Second, they can reduce their exposure to risks associated with relying on a single market. Overseas production bases have become an important way for supply chain companies to develop new sources of revenue growth.
“The model of expanding overseas as an industrial cluster is a core capability that distinguishes China’s lithium battery industry from its international competitors,” Yu Qingjiao, chairman of the Zhongguancun New Battery Technology Innovation Alliance, told Securities Daily.
“By drawing on China’s experience in coordinating a complete and mature domestic supply chain, companies can replicate an entire supporting industrial system at overseas production bases and develop a healthy industrial ecosystem.”
Yu said this approach represents a sustainable model of industrial development that combines internationalization with localization.
Building a Circular Resource System
As their overseas expansion deepens, lithium battery companies are broadening the scope of their international operations.
Rather than focusing solely on manufacturing, companies are increasingly developing integrated operations covering resource extraction, battery production, applications and maintenance, and material recycling.
Under this model, companies are looking beyond battery manufacturing and sales to build circular resource systems, recover valuable materials from retired batteries and improve the long-term profitability of overseas projects.
At the end of January this year, EVE Energy made progress in its international development strategy in Indonesia.
Working with several local companies across the supply chain, EVE Energy is developing an integrated new energy industrial system covering upstream nickel resource development, midstream material processing, downstream battery manufacturing and recycling.
A consortium comprising a CATL subsidiary, Indonesian state-owned mining company ANTAM and other partners is jointly investing in a nickel resource and battery supply chain project in Indonesia.
The project’s planned total investment is nearly 6 billion U.S. dollars. Its annual battery production capacity is designed to support between 200,000 and 300,000 electric vehicles, with plans to expand further into energy storage applications.
“The project integrates key stages from mineral resources and battery materials to battery manufacturing and recycling, establishing a complete industrial chain covering the entire battery life cycle,” said Li Ping, co-founder and vice chairman of CATL.
He added that the project would contribute to Indonesia’s transition toward a green economy and its goal of achieving net-zero carbon emissions.
As early as 2016, Chinese battery recycling company GEM proposed building a full life-cycle value chain for new energy products in the field of power lithium battery recycling.
The company has developed a system covering battery recycling, raw material remanufacturing, battery material remanufacturing and battery reassembly.
It has established partnerships with more than 1,100 automakers and battery manufacturers worldwide.
“For listed companies, establishing operations across the entire life cycle of new energy products opens up new avenues for profitability,” Luo Huanta, founder of Dadong Times, told Securities Daily.
“As overseas power batteries and energy storage batteries begin to reach the end of their useful lives on a large scale, the market for battery recycling will continue to expand.”
From an industry-wide perspective, the three emerging approaches to overseas expansion — establishing local factories, developing supply chain clusters and building ecosystems covering the entire battery life cycle — are not mutually exclusive. Instead, they are evolving in parallel.
Some companies continue to rely on product exports as their core business, while others are developing local joint ventures and manufacturing facilities. Supporting supply chain clusters are also taking shape, and a smaller number of leading companies are investing ahead of demand in closed-loop battery recycling systems.
Together, these overlapping models are creating a more diversified approach to the global development of China’s lithium battery industry.
From the early model of exporting products and seeking overseas market share, to developing local partnerships and industrial clusters, and eventually building ecosystems encompassing resources, manufacturing, operations, maintenance and recycling, China’s lithium battery industry continues to refine and upgrade its approach to international expansion.
Looking ahead, the global energy transition and China’s policies encouraging companies to expand overseas will provide further opportunities.
Lithium battery companies that tailor their investments to local conditions, carefully manage operational risks and build a lasting presence in host markets will be better positioned to compete globally and further strengthen the international reputation of China’s lithium battery industry as part of the green economy.