Supply and demand analysis of lithium battery industry in 2023
From the demand side, in recent years, the global new energy vehicle industry has developed rapidly, among which the development speed of China’s new energy vehicles is far beyond the global average level, and the trend of vigorous development of the future industry has been established.
From the perspective of the global new energy vehicle market, influenced by the policies and the energy environment, the global new energy vehicles have been developing rapidly in the past few years.
Table of Contents
Demand-side analysis of lithium battery
According to relevant data, in 2022, the global sales volume of new energy vehicles reached 10.522 million, with a year-on-year growth of 55.9%, and the penetration rate reached 12%. The industry has crossed the key inflection point and entered the growth period. It is expected that in the year 2025, the global sales volume of new energy vehicles will reach 21.446 million, and the penetration rate will increase to 23%.
From the perspective of China’s new energy vehicle market, China plays an important role in the global market position, and its development speed far exceeds the global average level. Data show that in 2022, China’s new energy vehicle sales reached 6.884 million, a year-on-year growth of 96.5%, penetration rate of 26%, in the global proportion increased to 65.4%, is expected to 2025 China’s new energy vehicle sales will reach 12.845 million, the penetration rate will increase to 37%.
2015-2025E Global new energy vehicle sales and penetration rate (ten thousand units;%)2015-2025E China new energy vehicle sales and penetration rate (ten thousand units ;%)
The booming development of new energy vehicles and energy storage market promotes the rapid growth of the global demand for lithium batteries, among which the demand for power batteries, as the core components of new energy vehicles, has the largest demand, and energy storage batteries contribute to the new growth point of demand.
From the perspective of lithium battery demand scale, according to the industry related report data, the global overall demand for lithium ion batteries in 2021 is 562.4GWh, with a year-on-year increase of 91% year on year, among which China’s overall demand for lithium ion batteries accounted for 59.4% of the world. It is expected that the global demand for lithium battery will reach 680 GWh, and the market size will reach 660 billion RMB;
By 2025, the market demand for lithium batteries will reach 1,778 GWh, and the market size will exceed 1.4 trillion RMB. From the perspective of demand structure, power battery is the main demand, and energy storage battery is a new growth point. The high sales increase in the new energy vehicle industry has led to the rapid increase in the demand for power batteries, and become the main demand of the lithium battery industry. In 2022, the demand structure accounted for 64%.
In addition, driven by the policy and energy crisis, the energy storage battery industry contributed to the new growth points of demand, and the proportion of demand structure increased from 7% in 2021 to 14% in 2022.
2014-2025E Global lithium battery demand, growth rate and forecast（GWh；%）The global lithium battery market segment demand structure in 2022（%）
Supply side analysis of lithium battery
From the supply side, in recent years, the global production of lithium batteries has grown rapidly, and the overall market supply is sufficient, among which China is the world’s largest producer and manufacturer of lithium-ion batteries. From the perspective of total supply, the global supply of lithium battery is greater than the demand, and the growth rate is relatively fast.
In 2022, global lithium battery production will be 839 GWh, up 55.7% year on year. It is expected that global lithium battery production will reach 2345 GWh by 2025.
China, Japan and South Korea are the major producers of lithium-ion batteries in the world, among which Chinese enterprises are in a relatively leading position in the field of lithium batteries, and the oligopoly pattern of leading enterprises in China, Japan and South Korea is basically formed. China is the world’s largest lithium-ion production and manufacturer of lithium-ion batteries, and in 2022, China’s lithium battery market output accounts for 77%.
Global lithium battery production and growth in 2017-2022 (GWh；%）
The global lithium battery market presents an oligopoly competition pattern, and the future market concentration will be further improved; the industry leaders appear the phenomenon of “increasing income but not increasing profit”, and generally face the pressure of the profit decline.
From the perspective of the industry competition situation, the lithium battery industry concentration degree is relatively high, showing an oligopoly pattern. The global CR10 reached 90% and CR3 reached 64.3%.
In the future, with the improvement of environmental protection requirements, lithium battery technology and quality requirements of the industry, it is expected that the living space of small enterprises will be gradually compressed, and the concentration of the industry will be further improved.
From the perspective of industry profitability, compared with the upstream of the lithium battery industry chain earning very much, the middle and downstream enterprises generally show the phenomenon of “increasing income but not increasing profits”.
From 2018 to 2022, the gross profit margin of China’s lithium battery head enterprises, including the top 10 4680 battery manufactureres generally showed a downward trend. In 2022, the average gross profit margin of China’s top enterprises was 14.7%. The main reason was the price increase of lithium battery, which caused great pressure on the cost end of lithium battery.
Market share of global lithium battery enterprises in 2022（%）Gross profit margin of China’s lithium battery head enterprises in 2018-2022
Summary and revelation
From the perspective of demand, the global lithium battery industry is facing a major opportunity for the vigorous development of the industry, and the market size is growing rapidly. It is expected that the market size will exceed 1.400 billion RMB by 2025. But from the supply point of view, the global lithium battery production grows rapidly and synchronously, and the overall market supply is greater than the demand;
The industry competition is increasingly fierce, the oligopoly competition pattern is basically formed, and it is expected that the market concentration will be further enhanced in the future. In this pattern of supply and demand, the key is for enterprises in the industry, especially small and medium-sized enterprises, to remain in an invincible position and continue to seek breakthroughs in battery materials, technology and quality indicators.
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Supply and demand analysis of lithium battery industry in 2023
From the demand side, in recent years, the global new energy vehicle industry has developed rapidly, among which the development speed of China’s new energy vehicles is far beyond the global average level, and the trend of vigorous development of the future industry has been established.
From the perspective of the global new energy vehicle market, influenced by the policies and the energy environment, the global new energy vehicles have been developing rapidly in the past few years.
Demand-side analysis of lithium battery
According to relevant data, in 2022, the global sales volume of new energy vehicles reached 10.522 million, with a year-on-year growth of 55.9%, and the penetration rate reached 12%. The industry has crossed the key inflection point and entered the growth period. It is expected that in the year 2025, the global sales volume of new energy vehicles will reach 21.446 million, and the penetration rate will increase to 23%.
From the perspective of China’s new energy vehicle market, China plays an important role in the global market position, and its development speed far exceeds the global average level. Data show that in 2022, China’s new energy vehicle sales reached 6.884 million, a year-on-year growth of 96.5%, penetration rate of 26%, in the global proportion increased to 65.4%, is expected to 2025 China’s new energy vehicle sales will reach 12.845 million, the penetration rate will increase to 37%.
The booming development of new energy vehicles and energy storage market promotes the rapid growth of the global demand for lithium batteries, among which the demand for power batteries, as the core components of new energy vehicles, has the largest demand, and energy storage batteries contribute to the new growth point of demand.
From the perspective of lithium battery demand scale, according to the industry related report data, the global overall demand for lithium ion batteries in 2021 is 562.4GWh, with a year-on-year increase of 91% year on year, among which China’s overall demand for lithium ion batteries accounted for 59.4% of the world. It is expected that the global demand for lithium battery will reach 680 GWh, and the market size will reach 660 billion RMB;
By 2025, the market demand for lithium batteries will reach 1,778 GWh, and the market size will exceed 1.4 trillion RMB. From the perspective of demand structure, power battery is the main demand, and energy storage battery is a new growth point. The high sales increase in the new energy vehicle industry has led to the rapid increase in the demand for power batteries, and become the main demand of the lithium battery industry. In 2022, the demand structure accounted for 64%.
In addition, driven by the policy and energy crisis, the energy storage battery industry contributed to the new growth points of demand, and the proportion of demand structure increased from 7% in 2021 to 14% in 2022.
Supply side analysis of lithium battery
From the supply side, in recent years, the global production of lithium batteries has grown rapidly, and the overall market supply is sufficient, among which China is the world’s largest producer and manufacturer of lithium-ion batteries. From the perspective of total supply, the global supply of lithium battery is greater than the demand, and the growth rate is relatively fast.
In 2022, global lithium battery production will be 839 GWh, up 55.7% year on year. It is expected that global lithium battery production will reach 2345 GWh by 2025.
China, Japan and South Korea are the major producers of lithium-ion batteries in the world, among which Chinese enterprises are in a relatively leading position in the field of lithium batteries, and the oligopoly pattern of leading enterprises in China, Japan and South Korea is basically formed. China is the world’s largest lithium-ion production and manufacturer of lithium-ion batteries, and in 2022, China’s lithium battery market output accounts for 77%.
The global lithium battery market presents an oligopoly competition pattern, and the future market concentration will be further improved; the industry leaders appear the phenomenon of “increasing income but not increasing profit”, and generally face the pressure of the profit decline.
From the perspective of the industry competition situation, the lithium battery industry concentration degree is relatively high, showing an oligopoly pattern. The global CR10 reached 90% and CR3 reached 64.3%.
In the future, with the improvement of environmental protection requirements, lithium battery technology and quality requirements of the industry, it is expected that the living space of small enterprises will be gradually compressed, and the concentration of the industry will be further improved.
From the perspective of industry profitability, compared with the upstream of the lithium battery industry chain earning very much, the middle and downstream enterprises generally show the phenomenon of “increasing income but not increasing profits”.
From 2018 to 2022, the gross profit margin of China’s lithium battery head enterprises, including the top 10 4680 battery manufactureres generally showed a downward trend. In 2022, the average gross profit margin of China’s top enterprises was 14.7%. The main reason was the price increase of lithium battery, which caused great pressure on the cost end of lithium battery.
Summary and revelation
From the perspective of demand, the global lithium battery industry is facing a major opportunity for the vigorous development of the industry, and the market size is growing rapidly. It is expected that the market size will exceed 1.400 billion RMB by 2025. But from the supply point of view, the global lithium battery production grows rapidly and synchronously, and the overall market supply is greater than the demand;
The industry competition is increasingly fierce, the oligopoly competition pattern is basically formed, and it is expected that the market concentration will be further enhanced in the future. In this pattern of supply and demand, the key is for enterprises in the industry, especially small and medium-sized enterprises, to remain in an invincible position and continue to seek breakthroughs in battery materials, technology and quality indicators.