According to CCTV financial reports, the lithium battery industry has set off a boom in capacity expansion. Since February this year, a number of lithium battery industry chain enterprises have announced the expansion of production capacity, which deeply reflects the continuous growth expectation of market demand for lithium battery products. According to industry insiders, the domestic lithium battery production schedule has picked up as a whole, and the top 20 battery factories are expected to increase the total output of power batteries and energy storage batteries by more than 60% year-on-year.
Lithium battery companies have joined the ranks of expanding production, and there are multiple key factors behind it. From a policy perspective, Governments worldwide have vigorously promoted the new energy development strategy and given extensive policy support to the energy storage industry. Local governments in China have actively introduced policies to support the construction of new energy storage and promote the development of energy storage on the power supply side and the grid side. Overseas, the US IRA Act supports the construction of energy storage projects through subsidies, the Federal Reserve is expected to reduce the cost of funds due to interest rate cuts, and Europe also has relevant policies to promote the development of energy storage. The vigorous promotion of policies has made the prospect of the energy storage market bright, and lithium battery companies have chosen to expand production in order to seize this development opportunity.
The strong growth of market demand is also an important driving force for lithium battery companies to expand production. The installed capacity of new energy in the world continues to expand, and large-scale new energy power generation such as wind power and photovoltaic power generation is intermittent and fluctuating, which requires energy storage systems to adjust to ensure the stability and reliability of power supply. In addition, the outdated power grids of developed countries need to be upgraded, and emerging economies such as Asia, Africa and Latin America have a large demand for power grid construction, energy storage can support and expand the power grid, solve the off-grid demand of high-risk power outage scenarios, and play an important role in the construction and upgrading of power grids around the world. The continuous improvement of this series of energy storage demand has brought a broad market space for lithium battery companies, prompting them to meet the large demand for lithium batteries in the market by expanding production.
Figure: A number of lithium battery companies have announced production expansions, and the demand for energy storage continues to improve
In addition, technological progress has provided solid support for the expansion of lithium battery enterprises. With the continuous development of lithium battery technology, the energy density, charge and discharge efficiency, cycle life and other performance indicators of the battery continue to improve, and the production cost is gradually reduced. The cost of large energy storage systems has dropped from US$150/MWh to less than US$100/MWh now, and the price of domestic energy storage systems is less than 0.5 yuan/Wh. The reduction of costs has gradually improved the economy of energy storage projects, and the application scenarios have been continuously expanded, which has further stimulated market demand and given lithium battery companies the confidence to occupy a larger market share through production expansion.
In this wave of expansion, many companies have made remarkable moves. CATL plans to build power battery production bases in many places, with a total investment of up to 86 billion yuan and an estimated new production capacity of 135GWh. EVE invested 30.521 billion yuan in Jingmen City, Guangdong Province to build a power battery industrial park with an annual output of 152.61GWh; In addition, second- and third-tier battery companies such as Grate Power Energy and Technology and Zhuhai CosMX Battery have also announced investment plans for battery projects of 10 billion yuan.
The rapid expansion of lithium battery companies and the enhancement of the willingness to replenish the warehouse have led to the increase in the sales of battery raw materials such as positive and negative electrodes and electrolytes. This series of expansion measures not only means that the market competition will become more and more fierce, but also will strongly promote the development of the entire industry.
Xiangcai Securities pointed out that in 2025, the bidding related to energy storage centralized procurement will remain hot, and the demand for energy storage will continue to improve. At present, the head iron-lithium plant is running stably, and most small and medium-sized enterprises are producing according to long-term orders. However, the purchase volume of iron and lithium by some battery cell factories has been slightly reduced, resulting in an increase in the overall inventory of iron and lithium enterprises. Although the profits of the industry have been repaired, from the perspective of comprehensive costs, most companies are still in a state of loss.
Overall, the expansion of lithium battery companies is a positive response to the growth of energy storage market demand. Although the industry is facing many challenges, with the advancement of technology and the gradual maturity of the market, the lithium battery industry is expected to usher in new development opportunities in the field of energy storage.
