9 major changes in the power battery industry in 2024
By Helen
December 21st, 2024
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In the past few years, the industry has experienced a roller coaster-like market, and China's lithium battery industry has shifted gears and entered a new cycle. If 2023 is the year when the lithium battery industry fell rapidly from a high position, then 2024 will be the year of bottoming out and rebounding.
This is mainly reflected in the fact that after the price fell in the first half of 2024 and the industry growth slowed down, the battery price stabilized and stopped falling in the second half of 2024. The "Golden September and Silver October" industry peak season exceeded expectations, driving the growth of installed shipments to exceed expectations. Among them, from September to November, the year-on-year growth rate of power battery installation exceeded 40%, and the market growth rate was better than the same period last year.
With the continuous adjustment of the industry in 2024, new situations and changes have also emerged in Chinese battery companies around production capacity, technology, and overseas expansion.
In the terminal market, power battery shipments have maintained medium-to-high-speed growth as a whole, corresponding to the stratification of the car market structure. Plug-in hybrid models continue to maintain ultra-high-speed growth, driving the increase in the market share of lithium iron phosphate installations.
At the price level, battery companies are gradually tired of price wars and are starting to move from volume price to volume value. Therefore, battery companies have accelerated the development of high value-added products, pursued more excellent battery performance, and promoted the commercialization of a number of battery technologies.
Among them, fast-charging batteries are rapidly popularized, and both ternary and lithium iron phosphate batteries pursue higher charge and discharge rates; semi-solid batteries have achieved a breakthrough in GWh installation.
At the overseas level, companies are also constantly innovating cooperation models and accelerating localization layout.
From the overall changes of battery companies, reviewing 2024, Gaogong Lithium Battery summarizes the top ten changes in battery companies.
1. Differentiation of capacity expansion
Disorderly capacity expansion leads to oversupply, triggers price wars, and disrupts the industry ecology.
In 2024, low-end and backward capacity will be eliminated in a concentrated manner, and the industry will move from capacity to quality.
During this period, the number of battery companies decreased, and cross-border expansion projects were shelved one after another.
According to data from Gaogong Industry Research Institute (GGII), the number of domestic power battery companies will be greater than 50 in 2023. Under the law of survival of the fittest in terms of capacity, it is expected that the number of battery companies will drop to less than 30 in 2027.
At the same time, in 2024, a number of chemical companies that originally crossed over to lithium batteries performed poorly in related businesses. Without production capacity, cost, technology, and channel advantages, their related projects were shelved and stopped production one after another, and the production capacity in production was also transformed into production based on sales.
In contrast, the high-quality production capacity of high-quality companies continues to expand. From the market situation, represented by mainstream battery manufacturers such as CATL, BYD, EVE Energy, Sinovation, and Guoxuan High-tech, their total production capacity continues to expand.
2. The competitive landscape of leading enterprises is stable
In terms of installed capacity, due to the survival of the fittest in the industry, the position of the top 10 power batteries has become more consolidated. In 2024, battery leaders represented by CATL will further expand their market share.
According to market data, the installed capacity of the top 10 domestic power battery companies reached 452.4GWh from January to November, and the installed capacity concentration of the top 10 power battery companies reached 95.6%, which remained stable compared with the same period last year. CATL's installed capacity accounted for more than 45% from January to November, an increase of 2 percentage points compared with the same period last year.
From the perspective of the global market competition pattern, the leading companies also performed steadily. From January to October 2024, the installed capacity concentration of the top 10 overseas battery manufacturers reached 90%, including battery manufacturers such as CATL, EVE Energy, Sinovation, Guoxuan High-tech, LGES, SK On, Samsung SDI, and Panasonic. Chinese battery companies have further expanded their overseas installed capacity share, and compared with the same period last year, the proportion of overseas installed capacity of Chinese battery companies has increased by 2.9 percentage points.
3. Prices stabilize and rebound
Overall, the price of lithium iron phosphate battery cells will be in the price range of 0.4-0.5 yuan/Wh at the beginning of 2024, and the price of battery cells will remain at 0.3 yuan/Wh from the end of the second quarter to the end of the year.
Reasonable price space and profit level are the common demands of the upstream and downstream of the industrial chain. Although the long-term downward trend of the industrial chain price remains unchanged, under the stabilization of industry capacity supply and demand, the subsequent cost reduction of battery cell prices depends more on the cost reduction brought by actual technology and process.
Gaogong Industry Research Institute predicts that the power battery industry chain is expected to usher in a price inflection point in the first quarter of 2025, further restoring the profits of the entire industry chain.
4. Reconstruction of the value of the industrial chain
In the past few years, the industrial adjustment has shifted the industrial center from the upstream to the mid- and downstream.
When the industry is in short supply, the upstream enterprises often take the lead; when the supply and demand return, the mid- and downstream enterprises take the lead. In recent years, battery companies have deepened the integration of upstream and downstream, and in the profit distribution of the industrial chain, they have reversed the trend of the surge in material prices driving the surge in battery cell prices in the past. However, correspondingly, the return of the bargaining power of the mid- and downstream will bring price pressure to the upstream material prices in the short term.
According to the financial report data of listed companies, in the first three quarters of 2024, the total profit attributable to the parent of major material companies was 4.92 billion yuan, a decrease of 67% compared with the same period last year, and the total profit attributable to the parent of major battery companies was 66.7 billion yuan, an increase of 16% year-on-year.
Today, the battery link has become the core of the power battery industry chain. In promoting the application of technological innovation and guiding the layout of industry capacity, the trend of leading battery companies is the industry vane.
5. Commercialization of high-performance battery technology
In the case of internal competition in the industry, major battery companies rely on their superior products to maintain their gross profit levels. CATL has increased its shipments of Kirin batteries and Shenxing batteries, which has helped to further increase its profits. Returning to the industry, CATL Kirin and Shenxing batteries not only excel in energy density and safety, but also lead the development of ternary batteries and lithium iron phosphate batteries in fast charging performance.
In promoting the popularization of high-performance batteries, 2024 is the year for the entire lithium battery industry to accelerate the layout of fast-charging batteries. EVE Energy, Guoxuan High-tech, Juwan Technology Research, Xinwanda, Honeycomb Energy, and Ruipu Lanjun have all launched their own fast-charging battery products.
In addition to fast-charging batteries, solid-state batteries are another track that cannot be ignored. Since the beginning of this year, leading battery companies and car companies have successively announced the mass production schedule of solid-state batteries. Lithium battery companies have taken the lead in launching a "positioning war" in solid-state battery technology, and semi-solid-state battery installations as a transition route have also achieved a GWh breakthrough.
6. Explore the boundaries of multiple applications
The application boundaries of lithium batteries are not limited to cars.
As the best energy carrier at present, lithium batteries have broad application scenarios in many fields such as transportation tracks, electric ships, and electric aviation. At present, the energy storage market has become the second growth pole of battery shipments, and the commercial verification of electric aircraft and electric ships is also in full swing. CATL has successfully tested a 4-ton civil electric aircraft, and an 8-ton aircraft is expected to be released in 2027-2028.
In addition, in the wider track, humanoid robots, VR equipment and other fields, their endurance performance depends on the commercial progress of high-performance batteries. Exploring the boundaries of multiple applications and finding multiple value growth has become the strategy of battery companies.
7. Collective overseas expansion of the industrial chain
It is a general trend for lithium batteries to go overseas, but judging from the overseas layout in recent years, this is increasingly reflected in the leading battery companies.
In particular, in recent years, European and American countries have required battery companies to invest in building factories to promote the return of manufacturing. The leading battery companies have continuously expanded their overseas market share by virtue of their technology, production capacity and brand advantages. In contrast, small and medium-sized enterprises lack experience in localized operations and international supply chain construction, and the trial and error costs are relatively high. In the absence of the opportunity to go overseas, the gap between them and the leading battery companies continues to widen.
From the perspective of overseas layout, the situation of collective overseas expansion of leading upstream and downstream companies is taking shape. For example, in Hungary, Morocco, Germany and other regions, the cluster effect of the lithium battery industry has been initially formed, and the creation of an industrial closed loop from raw materials to battery manufacturing to complete vehicles has also been formed.
In terms of overseas expansion models, leading companies are also constantly innovating cooperation models. Such as setting up joint ventures, technology licensing, and so on.
8. Zero-carbon factories are being built one after another
Achieving green development is the essential demand of the new energy industry.
For battery companies, building zero-carbon factories can achieve the triple goals of reducing costs and increasing efficiency, green transformation, and responding to overseas carbon tariffs. Since 2024, domestic battery companies have successively built zero-carbon factories.
As the construction of zero-carbon factories progresses, it will also drive changes in a number of new equipment and new processes. At present, battery production line equipment not only promotes digitalization and intelligence, but also considers the recycling of resources and energy saving in terms of functions.
9. Innovation in battery business model
The value of a battery is not just a one-time product transaction, but runs through the entire life cycle.
Battery recycling and cascade utilization build a closed loop for the recyclable use of battery cells. As for the battery products themselves, through their diverse business models, they can also solve various problems about energy replenishment for end users.
For example, the battery replacement model, through the standardization of battery cell products, replaces the original battery pack of new energy vehicles, greatly saving the time of energy replenishment. Compared with the residual value scrapping and performance degradation of battery retirement, the battery replacement model helps car owners save costs and is also conducive to ensuring the endurance performance of the car.
In addition, new business formats such as battery leasing models, V2G, and the integration of light storage and charging bring new business value and imagination space to the lithium battery industry.
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