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The Market Pattern of Power Batteries will Change Again

Latest updated: Dec 13, 2023

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The pace of new energy vehicle manufacturers developing their own batteries has not slowed down, despite their deepening cooperation with automakers. Recently, Changan Automobile and GAC Group have announced their latest progress in self-developed batteries. However, the utilization rate of power battery production capacity has decreased this year due to slower downstream demand and insufficient orders.


Industry insiders point out that as more and more car manufacturers establish production capacity, the market dynamics of power batteries will change again, and the issue of excess production capacity needs to be urgently resolved.


With the rapid development of new energy vehicles in the past two years, the scale of the power battery industry has also experienced explosive growth. In addition to battery companies actively expanding production capacity, automakers have also started to diversify their supply chain by self-developing, self-building, joint ventures, or equity investments in the field of power batteries.


Changan Automobile recently announced its latest plan for power batteries, which includes the launch of eight types of self-developed battery cells such as liquid-state, semi-solid-state, and solid-state batteries, aiming to achieve a battery production capacity of no less than 150GWh. GAC Group also stated that it will achieve mass production of full solid-state batteries in its vehicles by 2026. Feng Xingya, the CEO of GAC Group, mentioned that the company has included key technologies such as solid-state batteries, cobalt-free batteries, low-cobalt batteries, and sodium-ion batteries in its research and development efforts. Additionally, the first factory of Yinpu Battery, with an investment of 10.9 billion yuan and a production capacity of 36GWh, is about to achieve mass production.


Wu Hui, the General Manager of the Research Department of Eway Economic Research Institute and the Director of China Battery Research Institute, believes that car manufacturers entering the field of self-developed power batteries are advantageous for securing their own supply.


"If a large number of car manufacturers join the self-developed and self-manufactured power battery team, it will certainly seize a portion of the power battery market share."


It is worth noting that there is a considerable gap between power battery production and the number of batteries installed in vehicles. According to data from the China Automotive Power Battery Industry Innovation Alliance, from January to October this year, the cumulative production of power and energy storage batteries in China reached 611.0GWh, a year-on-year increase of 41.8%; whereas the cumulative installation of power batteries was 294.9GWh, a year-on-year increase of 31.5%.


"Car manufacturers" entry will certainly increase the overall production capacity of the power battery industry. However, because car manufacturers are unable to supply externally in the short term, they will usually plan battery capacity based on their own needs,” Wu Hui believes. As car manufacturers establish their production capacity and achieve self-supply, they will inevitably “unlink” from some battery companies, potentially resulting in idle production capacity for those battery companies.




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