Lanzhou - China’s power battery installations reached 410.2 GWh in the first seven months of 2026, up 15.4% year on year, driving continued demand across the battery materials supply chain, according to the China Automotive Power Battery Industry Innovation Alliance.

The growth is closely linked to China’s expanding new energy vehicle (NEV) market, with NEV sales reaching 9.007 million units in the first seven months of 2026, up 9.6% year on year. Rising demand for vehicles and batteries is also increasing focus on copper foil, a key battery component that affects cost, performance and supply stability.

A production line at Gansu Hailiang New Energy Materials in Lanzhou New Area made copper foil. (Photo/Huxin Luo)

On August 25, a Bridging News reporter visited Hailiang New Energy Materials Co., Ltd. in Gansu Province, where a Zhejiang-based company has built a new foothold in the battery supply chain. 

Hailiang Group, known for copper processing, entered lithium battery copper foil production in 2021 by establishing its first large-scale base in Lanzhou New Area. Within a few years, its products became part of the supply chains of major battery makers including CATL and BYD.

Power supply was a key factor behind the choice of Lanzhou. Pan Zhengze, Dean of the New Energy Materials Research Institute at Gansu Hailiang New Energy Materials, said producing one metric ton of electrolytic copper foil requires about 8,500 to 9,000 kilowatt-hours of electricity. 

A plant with an annual capacity of more than 100,000 tons can consume more than 1 billion kWh a year, making stable and sufficient power supply critical to large-scale production. Lanzhou New Area’s power supply and access to green electricity were therefore important factors in the company’s decision.

The company also considered copper resources in Gansu and nearby regions, its location linking China with Central Asia, and the area’s relatively dry climate when assessing raw-material transport, product storage and overall costs.

A worker inspected copper foil at Gansu Hailiang New Energy Materials in Lanzhou New Area on August 25. (Photo/Huxin Luo)

Copper foil output rises as battery supply chain tightens

The transition into new energy materials was not smooth. Hailiang entered the copper foil market just as the industry was expanding capacity rapidly while demand growth was slowing.

According to the China Nonferrous Metals Fabrication Industry Association, China’s electrolytic copper foil capacity had reached 1.129 million tons by the end of 2022, with about 700,000 tons of new capacity added in 2023. Oversupply pushed processing fees lower, and industry losses widened further in 2024.

Pan said the copper foil market had already become highly competitive when Hailiang entered the sector, and the business suffered significant losses in its early years. Supply and demand only began to improve in 2025.

According to the company's data, Gansu Hailiang posted a net loss of 247 million yuan (36.75 million U.S. dollars) in 2024. In 2025, copper foil sales rose 75.4% to 64,100 tons, and the company returned to profit with net income of 42.17 million yuan.

Pan attributed the turnaround partly to changes in industry supply and demand. Battery capacity invested in during 2023 and 2024 gradually came online in 2025, increasing demand for copper foil and tightening a market that had previously been oversupplied.

Competition is also pushing copper foil to become thinner. Gansu Hailiang has now developed the process capability to produce copper foil as thin as 2.5 microns.

A reporter held a sheet of copper foil between their fingers. (Photo/Huxin Luo)

The push for thinner foil is not simply about technical specifications. Within a certain range, thinner foil can still support anode materials and conduct electrons while reducing the amount of copper used in each battery. With copper prices rising in recent years, lower copper use can also help reduce material costs.

The next area of competition, however, may extend beyond power batteries. Rapid growth in AI servers, data centers and high-performance computing is increasing demand for higher-performance copper foil used in electronic circuits, especially for high-frequency, high-speed transmission and high-density integration. Pan said electronic circuit copper foil will be one of the company’s key development priorities.

At the same time, copper foil capacity also follows downstream battery makers overseas. Hailiang has built a copper foil plant in Indonesia, which is already in production. The company chose Indonesia partly to move closer to Southeast Asia’s growing battery supply chain and partly to reduce exposure to tariffs and other trade barriers when serving European and U.S. markets.

Pan said the Indonesian plant currently serves mainly Chinese battery companies that have built production facilities in Southeast Asia, including Sunwoda, EVE Energy and CATL.