Analysis of the lithium battery market for new energy vehicles in 2024

Analysis of the lithium battery market for new energy vehicles in 2024. 1 article amazing makes it clear!

Analysis of the lithium battery market for new energy vehicles in 2024. In the past two years, the new energy vehicle and energy storage industries have been highly prosperous, the demand for batteries has proliferated, and the proportion of batteries installed in new energy vehicles has declined. Due to the high nickel and cobalt prices, the differentiated growth of ternary lithium batteries and lithium iron phosphate batteries has been formed. China dominates the lithium battery market, and the global supply chain relies closely on its production capacity.

With the growth of long-range products, ternary batteries have recovered, and the total proportion of lithium iron phosphate batteries has dropped from 67% to 61%. In battery technology, the improvement of electrolytes is particularly important, which directly affects the performance and safety of batteries. With the promotion of policies, extended-range, and plug-in hybrids continue to strengthen, while pure electric vehicles are weak. Especially under the demand for long-range and high energy density, the selection and optimization of electrolyte materials have become one of the key research directions. It is expected that the growth in demand for battery installation of electric vehicles will continue to be slower than the growth in the total number of vehicles.

Lithium battery market analysis: the proportion of power battery installation

At present, the proportion of power batteries installed in the lithium battery market is constantly decreasing. In 2020, the installed capacity of power batteries reached 76%, 70% in 2021, 54% in 2022, 50% in 2023, and 46% in January-February 2024. The lithium battery market is growing rapidly and has become an important part of the global energy industry.

With the development of industries such as energy storage, especially the world energy crisis brought about by the Russian-Ukrainian crisis, the demand for batteries in industries such as energy storage has grown rapidly, resulting in a significant decline in the proportion of batteries installed. Both power batteries and energy storage batteries are overproduced and have relatively high pressure on inventory.

The growth rate of power batteries in 2021 and 2022 is lower than that of complete vehicles. The installation of power batteries in February 2024 is low, and the battery output is higher than the installation growth rate. Innovations in the lithium battery market continue to emerge, driving the continuous advancement of new energy technologies.

Lithium battery market analysis: the proportion of ternary batteries installed in domestic sales models has gradually recovered

The growth in demand for power battery installation is volatile. Demand increased by 10% in 2019; in 2020, 64GWh of power batteries were installed in domestic sales models, and demand increased by 2%; in 2021, 155GWh of power batteries were installed, and demand increased by 143%; in 2022, 295GWh were installed, and demand increased by 91%; in 2023, 388GWh were installed.

Among them, ternary batteries increased by 21% in 2019; decreased by 7% in 2020; increased by 91% in 2021; increased by 49% in 2022; and increased by 11% year-on-year from January to December 2023. Lithium iron phosphate batteries have grown significantly, increasing by 20% in 2020; 227% in 2021; 130% in 2022; and increased by 44% from January to December 2023. With the advancement of technology, the lithium battery market has ushered in more innovative products with high efficiency and long life.

In 2022, the installed capacity of power batteries was 295GWh, a year-on-year increase of 91%. Among them, the installed capacity of ternary batteries was 110GWh, a year-on-year increase of 49%. The installed capacity of lithium iron phosphate batteries was 184GWh, a year-on-year increase of 130%.

In 2023, the installed capacity of power batteries was 388GWh, a year-on-year increase of 32%. Among them, the installed capacity of ternary batteries was 126GWh, a year-on-year increase of 14%. The installed capacity of lithium iron phosphate batteries was 261GWh, a year-on-year increase of 42%.

In February 2024, the installed capacity of ternary batteries was 6.9 GWh, accounting for 38%, an increase of 6 points; while the installed capacity of lithium iron phosphate batteries was 11GWh, accounting for 61%, and the growth of ternary batteries improved.

Lithium battery market analysis: the growth of demand for automotive batteries continues to be strong

In recent years, the lithium battery market has been driven by environmental protection policies and has shown good development prospects. With the popularization of electric vehicles, due to the excellent life of lithium batteries, the demand for lithium batteries has shown explosive growth. The demand for passenger car batteries continues to grow strongly. In 2024, the battery demand for pure electric passenger cars increased by 15%, while the battery demand for plug-in hybrid passenger cars increased by 86%, which continued to grow strongly. Due to the low base factor of subsidy withdrawal, the battery demand for buses has relatively recovered, and the battery demand for special vehicles has also increased significantly.

Judging from the proportion of battery installation, the demand structure for power batteries has been changing rapidly in recent years. In 2020, pure electric passenger cars are still ranked first, pure electric buses are ranked second, and pure electric special vehicles are ranked third, while plug-in hybrid passenger cars are only ranked fourth.

This year, pure electric passenger cars still maintain the first place, while plug-in hybrid passenger cars rise to the second place, pure electric special vehicles rise to the third place, and pure electric buses fall to the fourth level.

In recent years, the pure electric bus market has declined sharply, while plug-in hybrid passenger cars have shown a rapid upward trend. Pure electric special vehicles have maintained a relatively stable battery consumption of about 7-8%.

At present, pure electric buses have dropped from 18.5% to a cumulative level of 1.1% in 2024, a decrease of 17 percentage points. The battery usage of plug-in hybrid passenger cars has grown relatively rapidly and has now risen from 7% to 23.4%, an increase of 16%, while pure electric has dropped to 67%, maintaining the absolute core battery demand characteristics of more than 90% for passenger cars.

The automotive industry boosts the lithium battery market
The automotive industry boosts the lithium battery market

Lithium battery market analysis: automobile certificate output

According to the certificate battery volume, the output of certificate products in February 2024 is 363,000 units, a year-on-year decrease of 22%, of which pure electric passenger cars decreased by 30% and plug-in hybrid passenger cars decreased by 5%. Pure electric special vehicles decreased by 31% year-on-year, and such production data is still relatively low.

Lithium battery market analysis: supporting battery companies are far from fully competitive

In the past few years, the competitive landscape of the battery market has not changed significantly. Due to the relatively slow technological progress in the power battery market and the relatively obvious scale growth characteristics, battery companies have obtained strong production and installation quantity growth characteristics.

The original battery pattern has not changed significantly. Whoever invests more will get a larger market share, so the main battery companies have continued to expand strongly, and small and medium-sized battery companies also have the opportunity to achieve certain growth through technological or other breakthroughs. Therefore, the battery pattern should be said to be relatively stable in the high-speed growth.

However, the opportunities for changes in the battery industry in the future are relatively large. In the future, the trend of vehicle manufacturers making batteries or vehicle manufacturers jointly making batteries with related companies is becoming increasingly obvious, and battery companies will gradually form core supporting products for vehicles.

At present, the demand for the high-end electric vehicle market is not very strong, but it is similar to the demand for upgrading “Lao Toule” to small and micro cars and low-end family transportation. Especially affected by the epidemic, the market demand for A0 and A00 vehicles is relatively high.

In terms of supply chain issues, vehicle manufacturers will become increasingly powerful in the future, and their control over battery companies and upstream industrial chains will be further strengthened, while their control over downstream brand marketing capabilities will also be further strengthened. Under the new energy system, the characteristic of “the whole vehicle is king” will continue to be reflected.

Lithium battery market analysis: lithium iron phosphate batteries need to decline

The current energy density range of the main battery of pure electric vehicles is between 125 and 160. In particular, the performance of batteries with a density of 125 to 140 in February 2024 reached 43%, an increase of 12 percentage points year-on-year.

In February 2024, the proportion of models with a battery energy density of more than 160Wh/kg was 16%, a significant decrease from 31% in 2020. This is mainly due to the decrease in energy density caused by the replacement of lithium iron phosphate batteries with ternary lithium batteries.

At the same time, as the market pays more and more attention to the safety of electric vehicles, lithium battery safety testing has become an important part of evaluating battery performance to ensure that new batteries find a balance between energy density and safety. Products with an energy density of less than 125Wh/kg increased from 9% in 2023 to 13% in 2024. This change also reflects the industry’s efforts to optimize battery safety and cost control.

Lithium battery market analysis: battery enterprise landscape

Competition in the lithium battery market is becoming increasingly fierce, and major manufacturers have increased their investment in research and development. The competitive landscape of battery companies has formed relatively strong characteristics of CATL and BYD. At present, the gap between BYD and CATL is still large. BYD’s share increased from 15% in 2020 to 17.8% in 2024, an increase of 2.9 percentage points.

CATL’s share increased by about 5.2 percentage points, and the share of other battery companies also showed a clear differentiation trend. Battery companies have formed the characteristics of slowing down the agglomeration effect of head companies. From the 72% share of the top two companies in 2022, it still maintains a proportion of 73% this year, and the space for other companies is only about 27%.

The product difference advantage of lithium iron phosphate batteries is obvious. BYD is relatively excellent, but it entered an adjustment period at the beginning of this year. CATL’s share of iron-lithium batteries has surpassed BYD since the beginning of this year. EVE Energy, Zhongxinhang, and Zhengli New Energy have improved significantly.

Due to BYD’s comprehensive transformation to lithium iron phosphate batteries, the advantages of ternary batteries of the top three companies such as CATL are more obvious.

The lithium battery market is expanding rapidly
The lithium battery market is expanding rapidly

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