The expansion cycle of China's power battery production capacity has ended and will enter a contraction cycle

On March 4th, China's Ministry of Industry and Information Technology released the operational status of the national lithium-ion battery industry for 2023. Overall, although the production of power lithium-ion batteries continued to grow year-on-year, but the growth rate plummeted by 84%. This indicates that the expansion cycle of power battery production capacity in China has ended, and 2024 will enter a contraction cycle.

In 2023, China’s total production of lithium batteries exceeded 940 GWh, with a year-on-year increase of 25%, and the total industry output value exceeded 1.4 trillion yuan.

Among them, the production of power type lithium batteries was 675GWh, a year-on-year increase of 23.65% compared to 2022 (545.9GWh). However, compared to the same period in 2021, the production of power type lithium batteries in 2022 increased by 148.5%, with a sharp decrease of 84% in growth rate.

In addition, the prices of products in the lithium battery industry have significantly decreased throughout the year, with prices of battery cells and battery grade lithium salts decreasing by more than 50% and 70% respectively from January to December.

According to data from the China Automotive Power Battery Industry Innovation Alliance, from January to December 2023, the cumulative installed capacity of power batteries in China was 387.7 GWh.

These data indicate that the problem of overcapacity in China's power battery industry is prominent at present.

In addition, the two leading companies, CATL and BYD, occupy over 70% of the market share, and the differentiation of power battery enterprises is intensifying.

Source:d1ev.com

Translated by; WONDEE Autoparts

2024/3/6