Strategic pivots transforming KBC's business, finances

At a factory in Yiyang, Central China's Hunan province, a carbon-ceramic brake disc made by KBC Corp Ltd is light enough to lift with one hand. Yet, as company executives readily admit, the true challenge is producing tens of thousands of them with the microscopic precision demanded by global automakers.

Nearby, KBC's next breakthrough appears deceptively simple — a black sheet less than half a millimeter thick, that resembles delicate traditional Chinese Xuan paper.

While the brake disc is already fitted onto mass-produced electric vehicles, the sheet — carbon paper vital for hydrogen fuel cells — is undergoing customer validation and initial deliveries. Together, they demonstrate how KBC is leveraging two decades of carbon-materials expertise to pivot beyond its traditional base in photovoltaic manufacturing.

"For more than 20 years, we have focused on just one thing," said Dai Chaohui, president of KBC. "We are now using our accumulated expertise to unlock new, high-value applications."

This strategic shift is reshaping KBC's finances. Photovoltaic products, which generated 990 million yuan ($146.7 million) in revenue in 2023, fell to 175 million yuan by 2025 amid broader solar sector realignment.

Meanwhile, its transportation and lithium-battery businesses surged to 615 million yuan, accounting for 76.6 percent of total revenue.

Making a carbon-ceramic disc requires weaving carbon fibers into a 3D skeleton before infusing it with carbon and molten silicon. The result is an ultra-tough composite offering high friction stability and heat resistance. Unlike foreign competitors predominantly using short fibers, KBC's flagship discs rely on continuous long fibers to achieve greater strength and toughness.

Weighing more than 60 percent less than traditional cast-iron brakes, KBC's discs significantly reduce unsprung mass, improve handling and help extend battery range. While prohibitive costs once kept this space-age technology confined to supercars, KBC's integrated manufacturing and self-developed furnaces have slashed production costs to roughly one-fifth of overseas levels.

This enables the technology to move from million-yuan hypercars to EVs priced under 400,000 yuan.

"Making one disc in a laboratory is simple," said Wang Hua, general manager of KBC's composite materials business. "Controlling industrial stability on the factory floor is the real challenge." KBC now holds more than 80 percent of China's market for passenger cars fitted with carbon-ceramic discs as standard.

"The key is not the material alone," added Li Jun, KBC's chief engineer and senior vice-president. "It is the integration of materials, equipment, engineering and process management into a single, unified system."

Market analysts see vast room for growth. Huayuan Securities projects China's automotive carbon-ceramic brake market will expand from 7.9 billion yuan in 2025 to 21.5 billion yuan by 2030.

To meet this surging demand, KBC currently has an annual capacity of 400,000 discs — enough for 100,000 vehicles — with plans to double that capacity.

While gross margins remained slim during early scale-up, executives estimate economics will improve significantly once annual applications exceed 200,000 vehicles.

Carbon paper represents KBC's next frontier. Serving as the gas-diffusion layer at the heart of hydrogen fuel cells, it must simultaneously conduct electricity, transport gases and drain water.

To achieve roll-to-roll production without material warping, KBC built a 50-meter-long furnace operating at up to 2,400 C. In customer tests, KBC's carbon paper has outperformed imported benchmarks while cutting costs by more than 20 percent, according to the company.

"Lower costs from mass production are inevitable, but what customers care about most is technology-driven cost reduction," said Long Peng, deputy general manager of KBC's hydrogen subsidiary. Although currently being delivered in small batches, domestic carbon paper is projected to capture a growing share of China's hydrogen market by 2030.