You probably already know that China is the world’s largest car market.

But what you might not know is that China’s leaders are pushing that nation’s automakers to improve their fuel standards. So by 2020 we should see the average Chinese-made car using 39% less fuel than models from 2008.

To meet this mandate, Chinese firms will begin rolling out “mild hybrids” – electric vehicles (EVs) powered by gasoline as well as by a new type of “low voltage” hybrid car battery.

This development puts China at the source of a dramatic technological breakthrough that’s certain to roil the $75 billion battery market.

And while no one can say how things will end up, you can be sure that there will be winners and losers in this sector of the market.

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Where Chinese Autos Get Their “Juice”

China’s car sector deserves attention for two reasons.

First, this is the world’s largest auto market, with annual sales well above 18 million units – a number that’s expected to grow by about 5% a year. Second, China’s move into low-voltage batteries shows just how vital EV tech has become.

Consider that several Chinese carmakers intend to use 48-volt, lithium-ion batteries to boost fuel economy by roughly 15%.

That may not sound like much of an increase, but China will be producing 21.5 million cars a year pretty soon. So, the savings start to add up.

Bear in mind, these are much smaller batteries than the 200-volt lithium-ions used in most leading EVs on the road today. The 48-volt systems are also 70% less expensive.

The 48-volt breakthrough from China has caused huge debate among analysts as to its global impact. No one seems to know what portion of the EV battery market this will capture in the next five years.