Cui Dongshu: In August, the loading of lithium-ion batteries for new energy vehicles increased by 35% year-on-year.

In August 2024, the installed capacity of lithium batteries reached 47GWh, a year-on-year increase of 35%. The installed capacity of ternary batteries was 12.1GWh, a year-on-year increase of 12%, accounting for 26%, lower than the same period; while the installed capacity of lithium iron phosphate batteries was 35GWh, with a year-on-year growth rate of 46%, accounting for 74%, with the growth of ternary batteries slowing down. From January to August, the installed capacity of lithium batteries reached 292GWh, a year-on-year increase of 33%. According to the qualified certificate battery volume calculation, the production volume of new energy vehicle qualified certificate products in August 2024 was 1.018 million units, a year-on-year increase of 31%. From January to August, it was 6.24 million units, a year-on-year increase of 23%, which is significant. Among them, pure electric passenger vehicles reached 3.4 million units, a year-on-year increase of 5%; plug-in hybrid passenger vehicles reached 2.5 million units, a year-on-year increase of 60%; pure electric special vehicles reached 300,000 units, a year-on-year increase of 31%. These production data are still quite good. In the past two years, the new energy vehicle and energy storage industries have been highly prosperous, leading to a rapid increase in demand for batteries. The proportion of battery installation in new energy vehicles has decreased due to high prices of nickel and cobalt, leading to differentiated growth between ternary lithium batteries and lithium iron phosphate batteries. As the demand for long-range products grows, ternary batteries still have a market, while price reductions drive an increasing proportion of lithium iron phosphate batteries. Due to adjustments to policies affecting the tax exemption for increasing the range of electric vehicles in the first half of this year, low-end micro electric vehicles have declined, and the trend for pure electric vehicles is weak, while extended-range and plug-in hybrids continue to strengthen. However, the policy of scrapping and replacing passenger cars intensified in July, benefiting micro electric vehicles significantly. Due to the slowdown in the growth rate of the export market for electric vehicles, the demand for battery installation in electric vehicles continues to grow slower than the total vehicle production in China. 1. The proportion of installed power batteries Currently, the proportion of installed power batteries in total production is continuously decreasing. In 2021, the installation rate of power batteries reached 70%, decreasing to 54% in 2022, and 50% in 2023. From January to August 2024, the proportion of installed power batteries decreased to 47%, with ternary increased to 49% and lithium iron phosphate to 46%. With the development of industries such as energy storage, especially the world energy crisis caused by the Russo-Ukrainian crisis, the demand for batteries in industries such as energy storage is growing rapidly, leading to a significant decrease in the proportion of installed batteries. Both power batteries and energy storage batteries are facing overproduction and relatively high inventory pressure. The growth rate of power batteries in 2021 and 2022 was lower than that of whole vehicles, and the installation rate of power batteries in 2024 is low, with battery production exceeding installation growth rate. 2. The decreasing proportion of ternary installed batteries in domestic vehicle models The demand for installed power batteries is fluctuating. In 2019, demand increased by 10%; in 2020, the installed power batteries of domestic vehicle models were 64GWh, with a 2% demand growth; in 2021, it reached 155GWh, with a 143% demand growth; in 2022, it was 295GWh, with a 91% demand growth; in 2023, it was 388GWh, with a 32% demand growth. In August 2024, the installed capacity of lithium batteries reached 47GWh, a year-on-year increase of 35%. The installed capacity of ternary batteries was 12.1GWh, a year-on-year increase of 12%, accounting for 26%, lower than the same period; while the installed capacity of lithium iron phosphate batteries was 35GWh, with a year-on-year growth rate of 46%, accounting for 74%, indicating a slight slowdown in ternary battery growth. From January to August, the installed capacity of lithium batteries reached 292GWh, a year-on-year increase of 33%. 3. Continuous strong growth in automotive battery demand The demand for passenger vehicle batteries continues to be strong, with a 17% increase in battery demand for pure electric passenger vehicles in 2024, while the demand for plug-in hybrid passenger vehicles increased by 83%, showing continuous strong growth. Due to weak demand for new energy passenger vehicles, the battery demand for passenger cars in August decreased by 29%, while the battery demand for pure electric special vehicles saw a significant increase of 70%. Looking at the proportion of battery installation, the demand structure of power batteries has been changing rapidly in recent years. In 2020, pure electric passenger vehicles were still in the first place, pure electric passenger buses in the second, and pure electric special vehicles in the third position, while plug-in hybrid passenger cars were in the fourth position. However, in the present year, pure electric passenger vehicles remain in the first position, plug-in hybrid passenger vehicles have risen to the second position, pure electric special vehicles have risen to the third position, and pure electric passenger buses have fallen to the fourth position. In recent years, the market for pure electric passenger buses has sharply declined, while the demand for pure electric special vehicles has increased rapidly. Currently, the proportion of pure electric passenger buses has decreased from 18.5% in 2020 to 1% cumulative in 2024, a decrease of 17 percentage points. The use of batteries in plug-in hybrid passenger cars has increased relatively rapidly, from 7% in 2021 to around 22% this year, an increase of 15%, while pure electric has decreased to 67%. The proportion of plug-in hybrids and pure electric vehicles together accounts for around 90% of the total core battery demand for passenger vehicles. 4. Vehicle Qualification Certificate Production According to the calculation of qualified certificate battery volume, the production volume of new energy vehicle qualification certificate products in August 2024 was 1.018 million units, a year-on-year increase of 31%. From January to August, it was 6.24 million units, a year-on-year increase of 23%, which is significant. Among them, pure electric passenger vehicles reached 3.4 million units, a year-on-year increase of 5%; plug-in hybrid passenger vehicles reached 2.5 million units, a year-on-year increase of 60%; pure electric special vehicles reached 300,000 units, a year-on-year increase of 31%. These production data are still quite good. 5. Supporting battery companies are far from fully competitive In recent years, there has been no significant change in the competitive landscape of the battery market. As the technological progress of the power battery market is relatively slow, but the scale growth characteristics are obvious, battery companies have achieved strong growth in production and installation quantity. The original pattern of batteries has not changed significantly; the market share favors those who invest more, thus forming a characteristic where leading battery companies continue to expand. However, medium and small battery companies also have the opportunity to achieve growth through technological breakthroughs or other means. Thus, the overall battery pattern is relatively stable amid rapid growth. However, there are significant opportunities for changes in the battery industry in the future, with the trend towards whole vehicle companies making batteries or collaborating with related companies to make batteries becoming more apparent, and battery companies gradually forming core supporting products for whole vehicles. Currently, there is a strong demand for high-end electric vehicles in the electric vehicle market, as there is a demand for upgrading from "elderly scooters" to micro-cars for family low-end transportation.Large, especially due to the impact of the epidemic, there is a higher demand for A00-level vehicles, but this year's short-range electric vehicles are not eligible for tax exemption policies, leading to a clear trend towards higher-end vehicles.In terms of the supply chain, in the future, whole vehicle enterprises will become increasingly powerful, with a stronger control ability over battery enterprises and the upstream industry chain, and at the same time, their control over downstream brand marketing capabilities will also strengthen. Under the new energy system, the feature of "whole vehicle as king" will continue to be reflected. 6. The energy density of high-energy density batteries needs to decrease Currently, the main energy density range of pure electric vehicles is between 125 to 160. Especially in August 2024, the proportion of batteries in the range of 125 to 140 reached 52%, an increase of 10 percentage points compared to the previous year. In the period of January to August 2024, the proportion of models with energy density above 160 was 14%, showing a significant decrease compared to 18% in 2023. This is mainly due to the decrease in energy density brought by the substitution of ternary lithium batteries with lithium iron phosphate batteries. The proportion of products with energy density below 125 decreased from 9% in 2023 to the current 4% in 2024, and it is expected to decrease further to 1% in the third quarter. 7. Battery enterprise landscape The concentration of top battery enterprises has slowed down. From 72% for the top two enterprises in 2022, it has remained at 71% this year, with the other companies accounting for only about 30% of the market. Due to BYD Company Limited's comprehensive transformation to lithium iron phosphate batteries, the advantage of ternary batteries for the top three companies like Contemporary Amperex Technology has become more prominent, with recent good performance also seen in Honeycomb Energy. This article is sourced from the WeChat public account "Cui Dongshu" and edited by GMTEight: Liu Xuan.