Flammable Lithium Batteries Will Slow The Aggressive Expansion Of Electric Vehicles – Analysis

By Xia Ri

Recently, a series of walkie-talkie explosion incidents in Lebanon has drawn global attention, particularly regarding the issue of lithium batteries overheating and exploding due to hacking software. This is expected to have a significant impact on China. According to the latest data from the Chinese Ministry of Industry and Information Technology, China's total lithium battery production exceeded 940 GWh in 2023, marking a 25% year-on-year increase. Research from the China Business Industry Research Institute indicates that in 2023, China's lithium battery production accounted for 73.8% of the global total, and it is projected that shipments will surpass 1,000 GWh in 2024.

In the electric bicycle market, the current Chinese ownership of electric bicycles has exceeded 350 million, with over 50 million of those equipped with lithium batteries. In the electric vehicle (EV) sector, as of the end of June 2024, the number of new energy vehicles (NEVs) reached 24.72 million, accounting for over half of the global total. If domestic policies continue to support EVs, the application scale of lithium batteries is expected to keep increasing.

In recent years, there have been numerous cases of lithium batteries exploding and catching fire in China, affecting a range of devices from mobile phones and power banks to e-bikes and EVs. Among these, the lower quality, high usage, and mobility of EVs pose a particularly high risk. According to ANBOUND’s founder Mr. Kung Chan, considering that many EVs in China use lithium batteries, currently the only explosive materials with no regulatory oversight, this is akin to carrying a bomb around. If hacked, an EV could become a mobile bomb, posing dangers to not only the passengers but also to the surrounding public.

In the past, relevant authorities in China have long overlooked the risks of lithium batteries or have intentionally downplayed these dangers to support policy measures. For instance, lithium batteries are not allowed on airplanes, yet their use in EVs is permitted without much restriction. This neglect inevitably threatens public safety, complicates community management, exacerbates conflicts between buyers and sellers, and may ultimately diminish consumer willingness to purchase, leading to a slowdown in the aggressive expansion of EVs.

One major concern is the frequent accidents that threaten residents' safety. According to an analysis of over 270 fire incidents in China involving NEVs in 2023, only 10% were caused by collisions, while more than 50% occurred during charging or when the vehicles were stationary. The primary culprit, known as "thermal runaway" in batteries, not only damages vehicles but also poses a serious fire risk.

Incomplete statistics indicate that from January to October 2021, there were over 14,000 fire incidents caused by e-bikes and battery malfunctions, resulting in 41 deaths and 157 injuries. In 2022, the number of EV fires soared to 18,000, and in 2023, reports of e-bike fires reached 21,000, a 17.4% increase from 2022. In the EV sector, during the first quarter of 2022, there were 640 fires involving NEVs, averaging about seven explosive events each day. As of the first quarter of 2022, the self-ignition rate for NEVs in China was approximately 0.072%, compared to 0.026% in 2020 and 0.03% in 2021.

Recently, Robin Zeng, chairman of CATL, publicly stated that the safety factor of some current power batteries is "far from adequate". Many products claim a safety failure rate at the PPM (parts per million) level, equating to a failure rate of one in a million, but the reality is closer to one in ten thousand or even one in a thousand. This discrepancy highlights a staggering gap between claims and reality.

The alarming incidents caused by lithium battery fires pose a significant threat to people's safety and have raised serious concerns among the public. A notable example is the fire in Nanjing's Yuhua District on February 23, which resulted in 15 deaths and 44 injuries. Another tragic incident occurred on the evening of September 13 in Shenyang, Liaoning Province, where a fire in a residential building led to four fatalities and three injuries. Such severe cases related to industrial policies continue to occur.

Around 80% of EV fires occur during charging, with over half happening at night. Furthermore, 90% of e-bike fires that result in injuries or fatalities occur in hallways, corridors, and stairwells. Many incidents involving NEVs primarily take place in well-sealed, high-load underground garages. In response, the government has enacted policies to enhance fire safety management, but this has led to community conflicts.

A key issue is the prohibition of e-bikes from entering buildings, raising concerns about the availability of parking and charging spaces. Many neighborhoods lack standardized plans for charging stations, leaving residents without adequate options for parking or charging their bikes. Those who park outside often worry about theft, resulting in frequent disputes with property management. Residents typically request the construction of new parking shelters with charging stations, while property management insists that costs be shared. This disagreement creates a deadlock.

Even where parking shelters exist, charging fees can be high, leading to significant annual costs that lower resident satisfaction. Notably, many hotels and residential complexes have banned NEVs from underground garages while allowing fuel vehicles. This unequal treatment has frustrated many NEV owners, sparking conflicts over safety and their rights.

In addition, unclear responsibilities increase conflicts between buyers and sellers. When an EV battery explosion occurs, consumers typically hold the seller and manufacturer accountable for product issues, yet lithium battery production often involves third parties. Even then, most sellers and manufacturers tend to blame improper use by consumers to deflect responsibility. This lack of clear accountability makes it difficult for consumers and manufacturers to reach a consensus, leading to heightened tensions.

For consumers, contacting industry authorities or quality assessment departments to investigate lithium batteries, or even filing lawsuits, can be costly and often ineffective. This is particularly true for online purchases of lithium batteries. In 2023, Black Cat Complaint, a website and app for customers to file complaints, recorded 1,092 complaints related to "battery explosions" and "battery self-ignition". Of these, 276 cases concerning "battery explosions" revealed that even when consumers sue sellers, the likelihood of receiving compensation is limited, and the legal process can be excessively long. Many consumers only realized the difficulties in seeking accountability when it is too late; they struggle to identify who should be responsible for the explosions.

The pager explosion in Lebanon calls for a thorough criminal investigation, and this requires time for the results of the technical analyses. Right now, there is a lot of misinformation circulating, often fueled by online trolls and attempts to shift blame. While Hezbollah boasts about its capabilities, it remains a loosely organized group, and the information they release is not always unreliable.

From a technical perspective, lithium is a powerful explosive material, whether on its own or mixed with other explosives. Hezbollah's widespread use of specific pagers creates a detonation mechanism that can be weaponized. Such incidents mean that EVs using lithium batteries in combination with smart software systems are highly unsafe and should be restricted.

For China's manufacturing industry, the most pressing challenge is to quickly find safe alternatives to lithium batteries. Tesla's decision to avoid pure lithium batteries in its top models is driven primarily by safety concerns. To truly achieve reliable and sustainable competitiveness in the market, Chinese manufacturers must offer safer products to the global market.

Each lithium battery explosion casts a shadow of doubt in consumers' minds regarding the safety of these batteries, undermining their trust and acceptance of this so-called "green technology". This inevitably affects confidence in the EV market and influences purchasing decisions, leading to a slowdown in the aggressive expansion of EVs. Therefore, the flammability and explosiveness of lithium batteries require serious attention from authorities. It is crucial to ensure that safety standards and industrial technology measures are effectively implemented to minimize the frequency of safety incidents and promote a more stable development of Chinese manufacturing.

Final analysis conclusion:

Considering that a large number of electric vehicles in China use lithium batteries, they can be seen as "mobile explosives". If hacked, the consequences could be very severe. In the past, relevant authorities have focused on the aggressive expansion of EVs for various reasons, often overlooking the dangers posed by lithium batteries, and it is now the time to change this.

• Xia Ri is an Industry Researcher at ANBOUND, an independent think tank.