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The extension of the San Bao period violates the law of battery life, and the price war has caused harm to all companies in the industry. To monopolize the market is ultimately to harm others and oneself. Some small battery manufacturers are quite dissatisfied with Chaowei.

Regarding the questioning of small and medium-sized battery manufacturers caused by Chaowei's fierce price war, Yang Yuanling stated that all price fluctuations are a natural choice of the market and there is nothing to say.

Pay for production expansion

But from another perspective, price wars are also a helpless move by Chaowei, as production expansion continues to increase Chaowei Power's inventory.

According to the company's financial report; The ending inventory value of Chaowei Power was 620 million yuan in 2010, 890 million yuan in 2011, and increased to 1.3 billion yuan in the half year of 2012.

In the past two years, the lead-acid battery industry has received frequent policy attention. In the blood lead incident in 2011, the Ministry of Environmental Protection of the People's Republic of China stopped production and rectified many companies in the Lead–acid battery industry nationwide. In April 2012, the Ministry of Industry and Information Technology of the People's Republic of China assigned the task of eliminating the output of 19 industrial industries, and the Lead–acid battery industry was included in the list for the first time this year. In July 2012, the Ministry of Industry and Information Technology issued the "Entry Conditions for the Battery Industry", further raising the industry entry threshold.

This series of signals is interpreted by large companies as a great opportunity to expand production on a large scale.

Chaowei Power is one of the fastest expanding companies among them.

Chaowei has established eight major production bases in Henan, Shandong, Jiangsu, Zhejiang, Anhui and other provinces through mergers and acquisitions, expansion of investment, and other means. The production increased from 43 million units at the end of 2010 to 56 million units at the end of 2011 and 75 million units in 2012, excluding the 12 million units each invested in Changxing, Zhejiang and Xinhe, Hebei this year.

However, according to market expectations in Chaowei's financial reports, the size of the electric bicycle lead-acid tram market will increase at a compound annual rate of 16.9 from 2011 to 2013. From this perspective, Chaowei is inevitably suspected of excessive expansion.

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