The new energy industry in a broad sense is profoundly changing the industrial structure of China and reconstructing the logic of industry growth. On January 12th, the State Council held a press conference on the import and export situation in 2023. China’s electric vehicles, lithium batteries and solar cell products became the “new three products” with a large increase in export volume, which not only reflected the effect of industrial upgrading, but also continued to promote domestic industrial integration and enterprise upgrading behind the scenes.In the eyes of industry experts, ncm material:10 Indeed, it has great development potential, which makes many investors more interested. https://www.canrud.com/products?categories=Energy+materials,Not+specified&function=Cathode
The development of things often has two sides. In the “new three kinds” lithium battery industry, China has an absolute advantage, but it has been blocked more and more in the process of going to sea. Competition is intensifying and overseas restrictions are increasing. To what extent can the export of lithium batteries relieve the pressure of overcapacity for enterprises? For the enterprise itself, what other methods can be the core of breaking the game?
In 2024, the lithium battery industry was busy looking for answers.
01
”The Wave of Lithium Battery Export”
In 2023, the annual press conference on import and export released the key export data. The total export of electric vehicles, lithium batteries and solar cells in China was 1.06 trillion yuan, which was the first to exceed one trillion yuan, up by 29.9% year-on-year, making it a “new three” export.
Among them, lithium batteries have attracted a lot of attention because of the relatively new industrial structure, China’s leading technology and industrial strength, and strong export power.
According to the share and leading degree of China enterprises in the lithium battery market, the data released by SNE research, a well-known research institution in the industry, shows that in the first three quarters of 2023, the amount of batteries carried by various electric vehicles (EV, PHEV and HEV) in the world was about 485.9GWh, a year-on-year increase of 44.4%. Among them, China enterprises not only have an amazing market share, but also shake the market structure in terms of growth capacity.
In the first 11 months of 2023, six of the top ten companies in the power battery market share were China enterprises, with a market share of 62.9%; Contemporary Amperex Technology Co., Limited ranks first with a market share of 37.4%, and it is the only supplier in the industry with a market share of more than 30%. The year-on-year growth rate of installed capacity is also at a high level of 52%. BYD ranked second, and the installed capacity of batteries in the first three quarters increased by 71.4% year-on-year.
* from CnEVPost
The leading position of Chinese enterprises in the new energy vehicle market is also clearly evidenced. In the early days, Contemporary Amperex Technology Co., Limited has been an important battery supplier of Tesla, and last year, it announced the cooperation with Ford to build a factory in the United States. In May last year, Tesla’s super factory in Berlin, Germany produced the first batch of BYD battery version Model Y. BYD blade battery was not only recognized by rivals, but also engraved its own name in the European market, which was self-evident.
With the strength behind this recognition, China Power Battery set a new record in the sea. According to the statistics of China Chemical and Physical Power Industry Association, in the first 11 months of 2023, the export of lithium batteries in China reached US$ 59.7 billion, or about RMB 424 billion, up 32.7% year-on-year. Among them, Europe accounts for about 40%, which is the largest export market, followed by the United States and Southeast Asia.
The advantages of China battery enterprises come from many aspects. The core reason is that China’s research and development of power batteries is in a leading position in the world, with rapid technological progress and good boarding effect, which is widely welcomed by car enterprises. For example, foreign media have tested Tesla’s charging data after carrying a blade battery. The results show that its high-power charging time lasts longer and its charging power is higher. BYD’s CTB battery structure can also work together with Tesla’s integrated die casting technology to reduce energy consumption.
On the other hand, the domestic battery industry developed earlier, there were a large number of market participants, and the tide of early financing expansion was fierce. Although it led to the problem of overcapacity, it drove the price of the whole industry down, making low costs more conducive to exports, and even forming a pattern of “leading technology and second-line capacity”. As early as 2022, players of different sizes in Contemporary Amperex Technology Co., Limited, Honeycomb Energy and other industries began to expand production by leaps and bounds, far exceeding the level that the market can digest in the short term.
* From Essence Securities.
The reduction of industrial chain cost has further added a fire to the madness of these players: A-share lithium battery materials companies generally experienced a decline in net profit in the semi-annual report in 2023. For example, Defang Nano, a leading cathode material company in Ferrous lithium phosphate, lost nearly 1 billion yuan in the first three quarters. We should know that the losses of upstream enterprises actually mean the cost reduction of battery enterprises.
Then, can the above dividends always escort the overseas expansion of Chinese enterprises? I am afraid the answer is no. In 2022, the year-on-year growth rate of China’s lithium battery exports was as high as 86.7%. According to the existing data, the growth rate in 2023 may not reach half of this data. The growth of market demand may not keep up with the growth of domestic capacity output.
What is even more worrying is the attitude of the main market. “Big customer” Europe attaches great importance to the new energy industry and is using a series of carbon policies to protect local enterprises. The United States, which has great growth potential, has chosen to be conservative and exclusive, which has directly cut off the way for many Chinese enterprises to enter. Even the cooperation between Contemporary Amperex Technology Co., Limited and Ford was only achieved after the production capacity was greatly reduced.
If you want to go to sea, the sea is uneven. The involution of power battery is already worrying. How to deal with these new concerns?
02
”the mountain of lithium battery export”
Just as the advantages of the power battery industry are clear, the emergence of the sea problem also has clear internal logic. Among them, the domestic involution is only the impact on profits, and the overseas geographical pattern is the big problem that may make going to sea “this road is blocked.”