Author: Zhao Jianguo Source: China Automotive News

The competitive pattern of the global power battery market is changing from China, Japan and South Korea to China's "monopoly".

Recently, South Korean market Research agency SNE Research released data show that in the first quarter of this year, the global electric vehicle power battery installed capacity reached 133GWh, an increase of 38.6%, maintaining a steady upward trend.

It is worth noting that in the world's top ten power battery companies, Chinese manufacturers led by Ningde Times and BYD accounted for 60% (60.9%) of the market share, while Ningde Times and BYD two companies occupied the global power battery market "half of the country" (51.2%). Among them, Ningde Times is the first place in the global power battery field, with a market share of 35%; Byd, with a global market share of 16.2%, surpassed LG New Energy and jumped to second place.

In contrast, the global market share of South Korea's three major battery manufacturers - LG New Energy, SK On, and Samsung SDI fell by 1.3 percentage points year-on-year, and is currently less than a quarter; At the same time, China's second-tier battery manufacturers also maintained rapid growth, and began to impact Japanese and Korean battery companies on the top ten list.

Chinese companies lead the way, with BYD gaining the most momentum

Data show that in the first quarter of this year, Ningde era power battery installed capacity reached 46.6GWh, an increase of 35.9%, occupying more than 1/3 of the global market share, ranking first. The "industry leader" position of Ningde era is stable, whether it is installed capacity or market share, it is more than 1 times higher than BYD. At the same time, Ningde Times in the innovation system is also constantly improving, continue to promote the battery material system, system structure, extreme manufacturing, business model and other innovation system construction, so that the product has a strong competitive advantage.

"In the first quarter of this year, Ningde Times maintained its industry leadership in the power battery market, with innovation capability as its core driving force." Fan Yongjun, secretary-general of Chengdu New Energy Automobile Industry Promotion and Application Promotion Association, said in an interview with a reporter from China Automotive News that in terms of technological innovation, Ningde Times has taken the lead in the industry in recent years to launch innovative products such as Kirin batteries, sodium-ion batteries and condensed matter batteries. Among them, the Kirin battery adopts the third-generation CTP technology of the Ningde era, and the system integration reaches a new high in the world, the volume utilization rate can reach 72%, and the energy density can reach 255Wh/kg. In March this year, Kirin battery has officially achieved mass production loading, as the global mass production debut model of Kirin battery, polar Krypton's pure power in the large MPV polar Krypton 009 is expected to be delivered in the second quarter of this year. In addition, the new models of AITO series and Changan Automobile, Avita and other new cars will also be equipped with Kirin batteries; The sodium-ion battery of the Ningde era will be launched on Chery models, and the two sides will jointly launch the "ENER-Q" battery brand; Condensed matter battery is a new product in the leading industry, Ningde era of condensed matter battery car level application products or will achieve mass production within the year.

It is worth noting that in the first quarter of this year, the market share of Ningde times fell by 0.8 percentage points, while BYD's market share increased by 5.8%, surpassing LG New Energy, ranking second with a market share of 16.2%. Byd was also the fastest growing enterprise in the top 10 list of global power battery installations in the first quarter, with a year-on-year increase of 115.5% and an installed capacity of 21.5GWh. In fact, since last year, BYD has begun to compete with LG New Energy for the runner-up position on the list, with a rapid growth rate.

"The rapid growth of BYD's power battery installed capacity is related to its complete industrial chain and multi-pronged layout." Lin Shuwen, a researcher at the East China Automotive New Material Technology Research Institute, told China Automotive News that on the one hand, BYD, which started from batteries, continues to innovate in the field of power battery technology, in addition to the second-generation blade batteries that have been mass-produced in a number of battery factories across the country, it is also developing new products such as solid-state batteries with higher energy density and better safety performance. The energy density of the solid-state battery can reach 400Wh/kg, which is twice the 180Wh/kg of BYD's second-generation blade battery, and is more competitive in the market. In January this year, BYD publicly said that the company's research and development team has fully covered all kinds of battery technology routes. On the other hand, BYD has accelerated its expansion in the domestic and foreign power battery markets, and its customers now include FAW, Lantu, Ford, Toyota, Mercedes-Benz, BMW and other domestic and foreign electric vehicle brands. These dynamics show that in the field of power batteries, BYD's technology and production capacity are constantly rising, surpassing LG new energy is also a reflection of its competitiveness.

Data show that BYD's global electric vehicle sales in the first quarter of this year exceeded 550,000, an increase of 92.81%, while leading the growth of the global electric vehicle market, it also reached a new level in the global power battery market. "Byd since the comprehensive transformation of new energy last year, electric vehicle sales and power battery installed capacity have shown rapid growth, can be said to complement each other." Li Ming, a professor at the School of Automotive Engineering at Geely University, said in an interview with China Automotive News that from BYD's "wild ride" in the power battery market, it can not only be seen that its technology research and development ability is constantly increasing, but also can find that its management integration ability for the supply chain continues to improve, and these factors make BYD's power battery price competitiveness further enhanced.

China's second-tier manufacturers rise, Japan and South Korea companies' back and forth '

In the top 10 list of global power battery installed capacity in the first quarter, LG New Energy, Panasonic, SK On, and Samsung SDI ranked third to sixth. Due to the rapid growth of electric vehicle sales in Europe and the United States, its main overseas markets, South Korea's three major battery manufacturers have achieved growth in installed capacity. Among them, LG New Energy, SK On and Samsung SDI increased by 37.5%, 5.1% and 52.9%, respectively, ranking third, fifth and sixth. However, although the Korean battery "big three" achieved year-on-year growth, the growth rate is not as good as that of Chinese battery manufacturers, and the market share is diluted, which is a matter of course.

"In the top 10 list of global power battery installations in the first quarter, BYD surpassed its Japanese and South Korean competitors both in terms of installed capacity and year-on-year growth." Fan Yongjun said that in addition, Chinese battery manufacturers Zhongchuang Singapore Airlines, Guoxuan High-tech, Yiwei Lithium Energy and Xinwang Da ranked seventh to tenth on the list, forming a catch-up trend for Japanese and Korean companies. Among them, in the first quarter of this year, the installed capacity and market share of Zhongchuang Singapore Airlines were close to Samsung SDI. Judging from the ranking, Samsung SDI is the competitor that Zhongchuang Singapore Airlines wants to surpass. No. 8 Guoxuan High-tech's installed capacity rose 13.7% year on year, helping its first-quarter revenue rise 83.26% year on year to 7.177 billion yuan. Net profit attributable to the parent increased 134.78 per cent year on year to 75.609,500 yuan. The ninth billion Wei lithium energy battery installed capacity in the first quarter rose 75.5% year-on-year, second only to BYD, and the market share also increased by 0.4 percentage points.

"At present, Japanese and South Korean battery manufacturers can be described as' under attack '." Shandong Province Battery Industry Association consultant Xie Yuzhong in an interview with the "China Automotive News" reporter analyzed that before the Ningde times and BYD, after the second-line Chinese power battery companies Zhongchuang New Aviation, Guoxun High-tech, billion Wei lithium energy, Xinwang Da and other efforts to catch up.

Xie Yuzhong pointed out that in recent years, China's electric vehicle production and sales continue to grow rapidly, not only the number of power batteries demand increased, but also the variety, type, quality and other requirements of the battery more and more, more and more high, which prompted many Chinese battery companies to carry out multidimensional innovation, especially in the battery structure innovation has made rapid progress. Just like BYD's blade battery, GAC's lithium iron phosphate magazine battery, Honeycomb Energy's Dragon scale armour battery and so on. The Japanese and Korean battery manufacturers have certain shortcomings in structural innovation, which is the main reason why the market share of Japanese and Korean battery manufacturers is surpassed by Chinese battery companies. However, last year, South Korean battery manufacturers noticed the new trend in the market and began to develop lithium iron phosphate batteries, and launched a sample at the beginning of this year. Although slow in the market, but because Japanese and Korean manufacturers in solid-state batteries go faster, coupled with the rapid catch-up in lithium iron phosphate batteries, South Korean battery companies will still maintain a strong market competitiveness.

Market competition is endless, and technical strength is the way to win. "Japanese and Korean power battery manufacturers still have a strong strength that cannot be ignored." Lin Shuwen believes that from a technical point of view, Japanese and Korean companies have mastered 80% of the world's core technology patents for lithium batteries, and in the current fierce competition in the development of solid-state battery technology, Japanese and Korean companies are still at the head. From the point of view of supporting customers, Panasonic and LG New Energy are long-term suppliers of Tesla, which is also the main factor supporting Panasonic and LG New Energy two battery installed capacity in the world. Among them, LG New Energy does not worry about orders due to supporting a number of high-sales electric models such as Tesla Model 3, Model Y, Ford Wild Mach-E and Volkswagen ID.3, Volkswagen ID.4; SK-On continued to grow with Hyundai Ioniq 5, Kia EV6 and Volkswagen ID.4 models. Samsung SDI mainly benefited from the increase in sales of BMW i4 and iX in the global market, as well as the increase in sales of Rivian R1T/S, a new American-made car brand that it supplies.

As one of Tesla's main battery suppliers, Panasonic supplies batteries mainly for Tesla's models in the North American market. Thanks to multiple price cuts, Tesla delivered 170,000 electric vehicles in the United States in the first quarter, up 55 percent from a year earlier. This made Panasonic's global power battery installed capacity in the first quarter increased by 37.7% year-on-year, close to the average growth rate of 38.6% in the global power battery market, and maintained a 9% market share.

Lithium price downward cost side improvement battery manufacturers profitability

Both head battery companies and second - and third-line power battery manufacturers are very sensitive to fluctuations in lithium prices. As an important raw material for lithium batteries, the price of lithium carbonate has been sharply reduced over the past period of time. After rising to a high of nearly 600,000 yuan a tonne at the end of last year, lithium carbonate prices have started the decline this year, falling about 66 per cent in just over four months to as low as about 170,000 yuan a tonne, but are expected to stabilise in the near future. Data from Shanghai Steel Union show that on May 10, battery grade lithium carbonate quoted 216,500 yuan/ton.

It is true that the rise and fall of lithium prices affect the nerves of the entire power battery industry. "The actual cost of battery-grade lithium carbonate should be about 30,000 yuan, and there is no reason to rise to 600,000 yuan, and the subsequent price is expected to decline rapidly, and it is not impossible to fluctuate down to less than 100,000 yuan per ton." Wang Yu, chairman of Funeng Technology, made such a prediction in late March; Mo Ke, founder and president of true lithium Research, expects that the price of lithium carbonate may fall to within 150,000 yuan/ton by the end of this year; Wang Qisui, senior vice president of Guoxuan High-tech and president of the China business sector, analyzed that the price of lithium carbonate should be more reasonable between 150,000 and 200,000 yuan/ton.

Xie Yuzhong believes that the price of battery-grade lithium carbonate has slipped from a high of nearly 600,000 yuan per ton to about 200,000 yuan now, which reflects the reality of excess capacity in the global, including the domestic power battery industry. From the statistics, the global power battery installed capacity in 2022 reached 517.9GWh, an increase of 71.8%. It is predicted that by 2025, the global power battery installed capacity is expected to reach 1550GWh. However, only domestic expansion projects that are being planned and started are expected to reach about 4,000 GWH in 2025, more than double the market demand. In this case, the power battery industry is bound to appear a new round of reshuffle and "elimination game", superior resources may be further concentrated to the head of enterprises, weak enterprises or mergers, or active transformation, or eliminated.

Due to the downward price of lithium and the improvement of the cost end, the financial performance of domestic head power battery companies in the first quarter is generally good.

Recently, power battery leading companies Ningde Times and Yiwei Lithium Energy have announced first-quarter financial results, and their performance has achieved substantial growth. According to the financial report, Ningde Times achieved operating income of 89.038 billion yuan in the first quarter of this year, an increase of 82.91%; Net profit 9.822 billion yuan, an increase of 557.97%; Yiwei Lithium Energy performance in the first quarter is also good, the first quarter to achieve operating income of 11.186 billion yuan, an increase of 66.11%; Net profit returned to the mother was 1.14 billion yuan, up 118.68% year-on-year. In addition, BYD achieved revenue of about 120.74 billion yuan in the first quarter of this year, an increase of 79.83%; The net profit was about 4.13 billion yuan, an increase of 410.89%.

Industry insiders pointed out that the main reason for the surge in the performance of power battery companies in the first quarter is the improvement of the cost side. Xiangcai Securities recently research report pointed out that lithium prices opened the downward cycle, with the price of lithium and other lithium battery materials callback, power battery cost pressure relief, power battery manufacturers thus ushered in a profit repair period.

Domestic overcapacity pressure to accelerate the layout of "volume" overseas

From the downward price of lithium, it can be glimpsed that domestic power batteries have fallen into a crisis of overcapacity. According to the data of China Automotive Power Battery Industry Innovation Alliance, in 2022, China's cumulative output of power batteries is 545.9GWh, while the cumulative sales of power batteries is 465.5GWh, and the cumulative installed capacity is only 294.6GWh; In March this year, China's power battery production and installed capacity were 51.2GWh and 27.8GWh, respectively, the first quarter of the two were 130.0GWh and 65.9GWh. At present, the output of the domestic power battery industry is much higher than demand, continuing the oversupply trend since last year, and the pressure of destocking has increased. In this context, "going to sea" has become an inevitable option for domestic power battery companies to seek market growth and meet customer needs. Recently, BYD, Ningde Times, Xinwang Da, Honeycomb Energy and other enterprises are accelerating overseas layout.

At the Shanghai International Auto Show in April this year, BYD brand and public relations general manager Li Yunfei told reporters that BYD locked new energy vehicle sales target of 3 million this year, including overseas markets and the Chinese market, "going to sea" business is becoming the company's new sales growth point. As a result, BYD's competitiveness in the global power battery market is expected to further enhance. Recently, foreign media reported that BYD or consider a new battery gigafactory in Spain. According to German media reports, BYD is supplying lithium iron phosphate blade batteries for the European version of the Model Y rear driving model produced by Tesla's German Gigafactory in Berlin. At the same time, other Chinese battery companies are also accelerating "going to sea." After the acquisition of the Bosch Gottingen battery plant, Guoxuan High-tech will also build factories in Germany, Vietnam, the United States and other places.

It is worth mentioning that the overseas business income of Chinese power battery companies is growing. Among them, the overseas sales revenue of Guoxuan High-tech in 2022 was 2.98 billion yuan, an increase of 464.76%. More than 15 overseas fixed customers were added throughout the year, including overseas passenger cars, commercial vehicles, energy storage and other strategic customers; In the first quarter of this year, the company's revenue reached 11.186 billion yuan, of which overseas revenue accounted for about 40%, which increased year-on-year. Overall, in the first quarter of this year, the global power battery installed capacity of 133GWh, China's power battery installed capacity is about 65.9GWh, and the installed capacity of overseas markets outside China has reached 67.1GWh, exceeding the Chinese market.

"China's power battery accelerated 'going to sea', this trend has been deeply reflected in the first quarter of the global power battery installed list." 'On the one hand, this is due to the huge pressure of domestic overcapacity,' Mr. Xie said. On the other hand, this is also one of the signs of the continuous improvement of the technological innovation ability of China's power battery enterprises. Overcapacity will certainly force enterprises to "go to sea" and find new growth points, but if there is no good technical basis as support, it will not be far. In recent years, China's power battery companies continue to emerge innovative waves, which is the real fulcrum for power battery companies to "go out".

"From a global perspective, vehicle electrification is becoming an irreversible and accelerating trend, bringing more global opportunities for power battery companies than ever before." Fan Yongjun said that from the perspective of overseas markets, under the pressure of multiple factors such as high subsidy stimulus, carbon emission regulations and energy crisis, the European and North American electric vehicle industry is accelerating, and there is still a large gap in the local power battery supply capacity in these regions, which is difficult to provide effective support, and this is the window of opportunity for Chinese battery companies. Moreover, European and American car companies are increasingly recognizing the continuous improvement of quality and increasing variety of Chinese power batteries, which is also a favorable factor for Chinese power battery companies to "go to sea".

It should be noted that some new regulatory changes in the European and American markets will have an impact on China's power battery "going to sea". For example, the U.S. Inflation Reduction Act requires that a certain percentage of power battery raw materials be produced in the United States or countries that have signed free trade agreements with the United States, or recycled materials in North America to enjoy federal tax breaks. In Europe, the introduction of the EU carbon tariff amendment and the latest revision of the New EU Battery Regulation mean that the control of the power battery industry chain in Europe will be stricter. These have brought severe challenges to China's power battery companies entering Europe and the United States. "Continue to strengthen technological innovation and actively adapt to market changes in order to maintain competitiveness in the international market, so that China's power batteries can better 'go out' and 'go in'." Fan Yongjun said.

Reprinted from http://www.batterychn.com/newinfo-1021-2