Electrical Equipment / Components & Telecoms

According to the report of Huacheng Import and Export Data Observation, recently, BYD released the brand new high-end car brand "Lookup" and two new models of the million-level. The independent brand of China's new energy vehicle enterprises drove into the million-level track again to make the industry boiling. As the basis of new energy vehicles, the power battery market has also received more attention.

Enter the track of high-quality development

According to the observation report of Huacheng Import and Export Data, from January to November 2022, the global power battery load was 44.6 billion watt-hours, up 74.7% year on year. The cumulative power battery load in China was 25.85 billion watt-hours, a double increase over the same period last year. In November 2022, China's power battery loading volume was 3.43 billion watt-hours, up 64.5% year on year, and the loading volume of Chinese enterprises increased by more than 100% year on year.

The growth of the load of power battery enterprises in China is inseparable from the production and sales data of new energy vehicles. Huacheng Import and Export Data Observation reported that in the first 11 months of 2022, China's production and sales of new energy vehicles completed 6.253 million and 6.067 million respectively, a year-on-year increase of twice. The number of new energy vehicles has exceeded 11.49 million, and the penetration rate of new energy vehicles is gradually increasing.

SNE Research pointed out that China accounts for more than 60% of the global market share of new energy vehicles and is accelerating its penetration into the global market.

The view is that the rapid growth of global production and sales of new energy vehicles has led to a rapid increase in the demand for power batteries, and the significant increase in the marketing objectives of new energy products of automobile enterprises forces battery enterprises to accelerate the implementation of capacity expansion plans to meet the marketing needs of downstream customers.

Ma Xiaoli, Deputy Secretary-General of China Automotive Power Battery Industry Innovation Alliance, believes that the power battery market is moving from rapid development to high-quality development, which can be summarized in eight aspects: first, the enhancement of innovation capability. The second is the improvement of equipment capability. Third, the improvement of manufacturing level. Fourth, the decline of comprehensive costs. Fifth, the improvement of the industrial system. Sixth, the supply of supporting facilities is stable. Seventh, the competitiveness was improved. Eighth, environmental and ecological friendliness.

Ma Xiaoli said that after the price of raw materials rose in 2021, the cost of battery cells returned to before 2017. The use of low-cost and high-cost hybrid material system will be a direction of the later development of the power battery market. In addition, the specification and size of the cell are developing towards the direction of developing large cell products, and the battery integration mode is developing towards the direction of highly integrated technology. Safe and fast charging may become the main direction of improving product competitiveness. The implementation of carbon footprint and carbon emission reduction plan will become one of the key considerations of the industry.

Will there be overcapacity?

Recently, a group of data has caused hidden worries in the industry: at present, the capacity planning published by the whole industry has reached 480 billion watt-hours, but it is estimated that by 2025, the demand for power batteries in China's new energy vehicle market will be about 100 billion watt-hours to 120 billion watt-hours.

It is predicted that the supply of power battery may exceed the demand, and the market will have planned overcapacity.

In recent years, China's power battery production and sales have maintained an overall upward trend. However, some institutions are not optimistic about the sales data of China's new energy vehicles in 2023, which deepens the speculation that there will be a structural surplus in battery supply.

Wang Xi, deputy director of the Battery Energy Storage Industry Research Office of the China Electronics and Information Industry Development Research Institute, believes that the actual production capacity and the capacity under construction should be taken as the main reference to measure whether the power battery capacity is surplus, and the planned capacity more reflects investors' expectations for the future development of the industry.

Wang Dongwei, chairman of Zhongtai Capital Investment Management Co., Ltd., believes that the lithium battery industry is still in the expansion stage, and the total production and material production are also accelerating.

The enterprise is optimistic about the future development of lithium battery. As the subsidy policy exits the stage, the view is that the loading volume of long-life lithium iron phosphate batteries will maintain a rapid growth, and with the upgrading and iteration of technology, the loading volume is expected to further increase in the future.

According to the Huacheng Import and Export Data Observation, BYD ranks the second in the global power battery loading list, and has surpassed LG New Energy, a South Korean company; Ningde Times ranks first, and the first two have occupied more than half of the market share. Among Chinese enterprises, Innovation Airlines, Guoxuan Hi-Tech, Xinwangda and Yiwei Lithium ranked seventh to tenth respectively.

Wang Xi said that in order to further promote the sustainable and high-quality development of China's power battery industry, multiple measures should be taken simultaneously, with overall layout and coordinated development.

First, optimize the allocation of resource elements and avoid homogenization and vicious competition. To guide lithium battery enterprises to reasonably formulate development goals based on the actual situation and industrial trends, and to appropriately expand the production scale according to the needs of the time on the premise of stable supply of key materials, sufficient investment in research and development and innovation, and adequate supporting funds; Take the regional market, industrial base, coordinated innovation ability, capital and talent supply and other factors endowment as the basis to coordinate the differentiated and characteristic layout; We will promote the withdrawal of backward enterprises and ineffective capacity.

The second is to encourage cluster-based collaborative development and enhance the international competitiveness of leading enterprises. Relying on the existing industrial base, we will focus on building an internationally competitive power battery advanced industrial cluster with battery enterprises as the leader and upstream material enterprises and related service industries as the supporting facilities. Actively guide the chain owners and supporting enterprises to become bigger and stronger, while filling the core technology gap and making up the supply shortage of key links, continue to forge the advantages and improve the international competitiveness.

The third is to deepen international cooperation and improve transnational operation capability and global industrial chain system. Make full use of the development opportunities of expanding the local market overseas, strengthen the development and utilization of overseas resources, the construction of battery production base and market development, and encourage leading battery enterprises to cooperate with upstream and downstream partners to actively build a global industrial chain system. At the same time, we will support enterprises in overseas mergers and acquisitions, equity investment and the establishment of research and development centers, build a global marketing service system, and improve the level of international development.