Policy window opens as demand for e-cigarette batteries surges

Lithium batteries account for 10%-30% of the cost of e-cigarettes, and with market demand driving growth, companies producing lithium batteries for e-cigarettes are also experiencing a boom.

With the deadline for PMTA submissions approaching in the U.S., there is expected to be a surge in short-term demand for e-cigarette production.

According to the U.S. PMTA (Premarket Tobacco Application) policy, any new tobacco product legally marketed in the U.S. after February 15, 2007, must submit an application and receive FDA approval. After submitting the application, the applicant can continue to sell the product for one year or until the product is approved or denied (whichever comes first).

The latest regulations state that the deadline for submitting PMTA to the FDA is May 12, 2020.

As the deadline approaches, e-cigarette brands may actively utilize the short-term policy window to stock up, and e-cigarette manufacturers are expected to see a significant increase in production demand.

What is the market size of e-cigarettes?

Data shows that global e-cigarette sales (excluding heated non-combustible products) reached approximately $33 billion in 2019, a year-on-year increase of 106.2%, growing 14 times compared to the global sales of $2.2 billion in 2012. Among them, the Chinese market ranked fifth in 2019, with domestic sales of $1.61 billion.

In terms of e-cigarette manufacturing, the market size of China's e-cigarette industry in 2019 was $7.87 billion, with export sales of $6.26 billion, covering the entire industry chain including atomizers, batteries, e-liquids, chips, and finished products. It can be said that over 90% of e-cigarette products globally originate from China.

Among them, lithium batteries account for 10%-30% of the cost of e-cigarettes, and with market demand driving growth, companies producing lithium batteries for e-cigarettes are also experiencing a boom.

Recently, several e-cigarette manufacturers have reported a shortage of e-cigarette batteries, with many companies experiencing a surge in demand for e-cigarette batteries and actively seeking sources, even placing advance orders.

Currently, companies involved in the business of e-cigarette lithium batteries include Penghui Battery, Yiwei Lithium Energy, Zhijian Technology, Yinghe Technology, and Yingqu Technology.

High-tech lithium battery has learned during its 10th anniversary tour that Zhijian Technology mainly produces small soft-pack polymer batteries, currently focusing on supporting the Bluetooth headset and e-cigarette markets. The general manager of Zhijian Technology, Han Yanqing, stated that their production capacity can reach 100,000 units per day, and since the beginning of the year, the demand for e-cigarette batteries has significantly increased.

Penghui Energy has business cooperation with many domestic and foreign e-cigarette clients, including Micron and Heyuan Technology, currently mass-producing disposable e-cigarette batteries, including cylindrical types such as 08570, 08400, and 13300.