In recent years, the new energy vehicle industry has experienced rapid growth against the backdrop of worsening environmental issues and a growing consensus on diversifying energy sources. As the core component of electric vehicles, power batteries play a crucial role in the development of the new energy automobile sector. With supportive policies and collective efforts, China's power battery industry has made significant progress.
The scale of power battery production is expanding quickly. It is expected that the production and sales of domestic new energy vehicles will continue to grow at a rapid pace over the next five years, with a compound annual growth rate exceeding 30%. The explosive growth of the new energy vehicle market directly fuels the rapid expansion of the power battery industry.
According to data from the "China Power Battery PACK Industry Development Forecast and Investment Analysis Report" by the Prospective Industry Research Institute, the output value of China’s power batteries reached 38 billion yuan in 2015, representing a year-on-year increase of 262%. By 2016, the output value had risen to 64.5 billion yuan, surpassing traditional digital lithium batteries for the first time and becoming the largest segment of lithium battery consumption.
With new policy incentives and future improvements in lithium battery technology and cost reduction, demand for power batteries is expected to surge in the coming years. In 2016, China's automotive power battery production was 30.8 GWh, and it is estimated to reach 141 GWh by 2020.
Looking ahead, the cumulative number of new energy vehicles in China is projected to rise significantly over the next five years. Despite this positive outlook, the power battery industry is currently facing overcapacity issues. Only a few major players, such as BYD and CATL, have production capacities close to 35 GWh, while the top six companies collectively exceed 75 GWh. If these companies supply only 32% of passenger car capacity, the industry remains oversupplied. This overcapacity is likely to drive consolidation and restructuring, with only the most competitive firms able to thrive.
Although China's power battery industry has entered a new stage of development, challenges remain in terms of industrial structure, manufacturing processes, and technological innovation. Additionally, the rapid advancement of international vehicle and battery technologies presents significant pressure on China’s position in the global market.
For power battery companies, addressing overcapacity and accelerating the transition to high-energy-density batteries are key trends. While the shift toward ternary lithium batteries is inevitable, the pace of adoption may slow in 2018. To navigate these challenges, the following strategies are recommended:
1. Enhance new energy vehicle policies, upgrade production chain management, and strengthen sales standards to create a fair competitive environment.
2. Maintain strict oversight of power battery production, monitor industry capacity, and promote collaboration among leading enterprises to achieve economies of scale.
3. Focus on technological innovation, particularly in improving energy density, charging speed, safety, reliability, and battery lifespan.
Despite challenges like subsidy reductions and mileage regulations, the gap in high-quality capacity remains a critical driver for power battery companies to invest and expand. Major brands must develop tailored strategies that align with their strengths to further enrich the industry landscape.
Wonke Electric CO.,Ltd. , https://www.wkdq-electric.com