China's power battery sector has developed rapidly in recent years, with domestic companies dominating the global power battery market thanks to its technological advances, according to a research firm.

Compared with the rest of the world, China's power battery market is more mature with lower production costs and higher volumes, according to an analysis by BloombergNEF.

Average battery pack prices have been the lowest in China at $126 per kilowatt-hour amid intense price competition, as battery manufacturers ramp up production capacity.

Prices in the United States and Europe are 11 percent and 20 percent higher, respectively, it said.

China has seen many breakthroughs in battery materials and electric vehicle technology applications in recent years.

It has the world's largest battery manufacturing value chain, from material research and development, battery production and recycling to equipment support.

At the same time, China has formed a relatively complete EV manufacturing supply chain, with about 70 percent of global battery production capacity located in the country, according to China EV100, a think tank on EVs.

BloombergNEF expects continued investment in research and development, manufacturing process improvements and capacity expansion across the supply chain to further improve battery technology and reduce costs over the next decade.

Next-generation technologies, such as those applied in silicon and lithium metal anodes, and solid-state electrolytes, will play an important role in enabling further price reductions, it added.

According to Dongxing Securities, against the backdrop of growing demand in overseas markets, domestic power battery companies are expected to further increase their global market share, while stepping up expansion on the back of a well-developed industry chain and innovation ecosystem.

Leading companies will seize the opportunity in advance, benefiting significantly from the overseas market environment and profit potential, it added.

Many Chinese battery makers are already charting global expansion plans.

Gotion Inc unveiled plans to set up a $2 billion EV lithium battery manufacturing plant in Illinois in the United States. Located in Manteno, the facility is expected to produce 10 gigawatt-hours of lithium-ion battery packs and 40 GWh of lithiumion battery cells a year when it begins production next year, said the Anhui province-based company.

Svolt Energy Technology said its battery plant in Thailand has started construction. The factory is designed to have a production capacity of 60,000 sets of module packs annually, which may further increase to 118,000 sets if market demand is large, it said.

Wu Wei, an assistant professor at the China Institute for Studies in Energy Policy at Xiamen University, said he believes the trend of seeking overseas expansion will further drive up China's share in the global battery market.

"China's battery exports have been experiencing rapid growth considering the relatively limited battery production capacity and higher costs overseas," Wu said.

"With the industrial chain expanding and costs decreasing, the share of Chinese batteries in the global market is expected to further expand and China will continue to drive the growth of the industry going forward."

BloombergNEF expects battery prices to decline in the next few years, primarily due to significant growth in capacity at various points in the value chain, coupled with weaker-than-expected demand.

Chinese companies continued to dominate the global power battery market in the first nine months, responsible for 62.9 percent of battery installations worldwide, according to a report by South Korean market consultancy SNE Research.

Despite the numerous trade barriers and comparatively high costs abroad in recent years, Wu said expanding business overseas is still important for Chinese battery firms.

Domestic market scale is necessary to ensure cost-effectiveness advantages brought by economies of scale, while domestic companies should also step up investments in new technologies to ensure they remain technologically advanced amid future transformations, he said.

zhengxin@chinadaily.com.cn