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Lishen plans to charge ahead with batteries for Coda

By Li Yang and Wang Yu (China Daily)
Updated: 2009-08-17 08:04

Tianjin Lishen Joint Stock Co, a battery supplier of the all-electric sedan Coda that is due to launch in the US in fall 2010, plans to spend 5 billion yuan over the next three years to boost its lithium ion auto battery business.

"We have high expectations for the industry's future prospects," said Richard Liang, Lishen's vice-president.

"We aim to become the world's leading manufacturer of a range of auto power products from cells to battery management systems (BMS)," added Liang.

The investment (1 billion yuan by the second half of next year and the other 4 billion yuan by 2012) will forcefully foster Lishen's production capacity, making its lithium ion battery segment capable of charging 2,000 electric vehicles by 2010 and 20,000 by 2011.

Lithium ion battery production could be earning the company as much as 2 billion yuan, or about one-third of Lishen's total income, by 2011, according to Liang.

Lithium ion batteries' relatively high cost is currently an obstacle to widespread commercialization of electric vehicles.

Liang said he believes the present high cost of lithium ion batteries and the resulting high prices of electric vehicles are mostly due to patent law-suits between major international materials suppliers.

"With the end of patent law-suits, material costs could fall at least by half in the next two or three years, and the overall cost of electric vehicles will fall by some 30 percent, accordingly. With the development of the industry, higher production efficiency and facility depreciation, prices can be expected to fall even further," Liang said.

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Lishen is China's leading researcher and manufacturer of lithium ion batteries and has been actively taking part in domestic projects such as manufacturing the 50 hybrid power buses used in Tianjin during last year's Beijing Olympic Games.

Lishen will continue to develop in the domestic market but will gradually shift its main focus to international markets after the Coda launch in the US next year, said Liang.

"The American market is more mature and ready for electric vehicles compared to the Chinese market. Research shows that the average American drives 80 km (or 50 miles) a day to get to work, which means that there are real economic incentives for Americans to choose an electric vehicle, especially with high petrol prices around the globe," said Liang.

Kevin Czinger, CEO of Coda Automotive, a subsidiary of Miles electric vehicles, said that both Lishen and Miles add "a necessary complement to the other".

Liang said he believes that Lishen's cooperation with Miles is beneficial to Lishen's development, since it gives the battery company better access to international markets and foreign capital and also helps it capitalize on international resources in research and design.

Lishen is based in China's northern municipality of Tianjin and its clients include Apple, Motorola and Samsung.

It is also among the first companies in China to start research and development on lithium ion batteries for electric vehicles and is a long-time partner with Valence, the world's major lithium ion battery researcher and manufacturer.

This May, Lishen and Miles signed an agreement to establish a Tianjin-based joint venture, 60 percent of which will be owned by Lishen, to design and manufacture power systems for Coda, which is the world's first attempt at a commercial all-electric vehicle.