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Continuing the trend of the second half of last year, power and energy storage companies will be in a state of high production and full delivery in the first quarter of 2025. In the first quarter, China's lithium battery shipments reached 314GWh, a year-on-year increase of 55%. Among them, the shipments of power and energy storage batteries were 210GWh and 90GWh, respectively, with year-on-year increases of 41% and 120%, respectively. It is expected that the overall lithium battery production in April will increase month on month.
The momentum of downstream market scenarios has driven a new wave of expansion for leading battery companies. The expansion actions of CATL, EVE Energy, Gotion, Ganfeng Lithium, and others have boosted the confidence of the entire industry. From January to March alone, CATL added 6 new production capacity projects in Fujian, Shandong, Henan and other regions of China, including two projects with a designed annual production capacity of 40GWh and two projects with a designed annual production capacity of 60GWh.
A more intuitive manifestation is that from the perspective of industry order dynamics from January to April, Chinese lithium battery companies have won multiple billion dollar orders in the fields of positive and negative electrodes, electrolytes, separators, equipment, and battery cells.
Significant increase in overseas energy storage battery orders
In the power market, it is evident that with the current stable market structure, domestic battery companies have fewer new customers and orders in the passenger car sector, mainly consisting of lithium iron phosphate; Overseas, Korean battery companies mainly sign contracts, with American customers being the majority.
CATL is supplying Ford with lithium iron phosphate batteries, including the Shenxing Superfast Charging Battery, which are expected to be used in the Mustang Mach-E, F-150 Lightning, and other models starting next year. This cooperation is undoubtedly a signal for CATL to accelerate its entry into the North American market. The share of high-end product lines represented by Kirin and Shenxing batteries in CATL’s total sales continues to increase, and it is also significantly improving Ningde's profit margin.
On April 21st, CATL launched the second generation Shenxing Battery, which can achieve a range of 800 kilometers and a peak charging rate of 12C at the same time. In addition to passenger cars, leading battery companies are setting their sights on the commercial vehicle market. CATL, EVE Energy, Gotion, BYD, Honeycomb Energy and other companies will experience significant growth in commercial vehicle installed capacity in 2024.
On April 10th, EVE Energy reached a strategic cooperation agreement with KION Battery Systems (KBS), a subsidiary of Germany's KION Group. According to the agreement, both parties will focus on the large-scale application of 21700 cylindrical batteries in the field of European logistics vehicles, accelerating the zero carbon transformation of European industrial transportation scenarios.
In addition to disclosing orders, CATL also continues to deepen cooperation with commercial vehicle leaders such as FAW Jiefang, BAIC Foton, and Jiangqi Group, and has signed a long-term cooperation agreement with BAIC Foton for ten years, deeply binding to the rapidly growing commercial vehicle market.
What is even more remarkable is that the energy storage market continues last year's high prosperity, with energy storage companies winning multiple GWh large orders. From the perspective of policy environment, after the release of Document No. 136, new energy developers concentrated many energy storage projects in April and May to avoid the risk of electricity price fluctuations; At the same time, influenced by US tariff policies, European and American markets as well as customers engaged in transit trade have placed orders in advance.
Under the current wave of "rush to install", two companies, CATL and BYD, have successively broken the order records for energy storage projects in the Middle East. In January of this year, CATL became the preferred battery energy storage system supplier for the UAE RTC, the world's largest joint solar and battery energy storage project. The total investment of this project exceeds 6 billion US dollars, covering a battery energy storage project with a total capacity of 19 GWh and a photovoltaic project with a capacity of 5.2 GW.
On April 27th, following the 12.5GWh global largest grid side energy storage project cooperation reached with Saudi Electricity Company in early 2025, BYD Energy Storage completed the lifting operation of 120 MC Cube-T cube energy storage system cabinets at Beijisi Port in Beibu Gulf, Guangxi, and successfully loaded them onto the ship.
In April, EVE Energy signed a total of 11 GWh of energy storage contracts with Wotai Energy and Weisheng Energy. At the beginning of 2025, EVE Energy signed a strategic procurement cooperation agreement with Haibosichuang for 50GWh battery cells, bringing the total number of cooperative orders signed by EVE Energy to 61GWh.
In addition, according to market feedback, Penghui Energy's new generation of large cylindrical batteries for small storage, launched last year, has been consistently selling well since last year. Even though two new lithium ion batteries production lines were added last year, they still operate at full capacity; Yuanjing Power also stated that the company is currently maintaining full production capacity.
Lithium materials with frequent occurrence of long single sheets
Driven by the dynamic energy storage market, lithium iron phosphate has become a more favored technology route for domestic and foreign car companies and owners, and upstream suppliers of lithium iron phosphate cathode materials have become major buyers.
In the first quarter, the lithium iron phosphate industry frequently saw large orders, and Lopal Tech, Fengyuan Shares, and others received industry attention. For example, Lopal Tech has won a long-term order from CATL and has been added by LGES. In January 2025, its subsidiary, Lithium Source (Asia Pacific), was "secured" by Blue Oval and will sell lithium iron phosphate cathode materials to the latter. The initial supply period is 5 years, from 2026 to 2030; In the same month, the company reached a framework agreement with CATL to supply lithium iron phosphate cathode materials to the latter by 2025, with an expected sales ceiling of 7 billion yuan.
A significant change is that the increase in overseas orders has accelerated the process of domestic lithium iron phosphate enterprises going global.
At present, Chinese companies such as Wanrun New Energy, Hunan Yuneng, Defang Nano, Lopal Tech, and Huayou Cobalt have confirmed the overseas layout of lithium iron phosphate production capacity. It is worth noting that despite frequent large orders, most leading lithium iron phosphate companies are facing difficulties in profitability in terms of performance.
At present, the lithium iron phosphate market is showing a continuous downward trend, mainly due to the influence of upstream lithium carbonate, the lack of strong support on the cost side of lithium iron phosphate, and the overcapacity stage of lithium iron phosphate. In a buyer dominated market, iron and lithium enterprises have weak discourse power, and the price increase is mainly in the fourth generation products.
Currently, the overall operating rate of the industry remains around 50%, but the overall operating rate of the top companies is above 70%. By 2025, some companies will continue to clear their positions.
In terms of ternary aspect, its market demand in high-end application scenarios is still considerable, with most of the overseas orders disclosed by top companies at present.
On March 10th, Dangsheng Technology announced that the company and its subsidiaries have recently signed a long-term supply agreement with LG New Energy. According to the agreement, LG New Energy expects to purchase 110000 tons of high nickel and medium nickel lithium battery cathode materials from Dangsheng Technology from 2025 to 2027.
Dangsheng Technology pointed out that based on current market prices, the total amount of the agreement is estimated to be RMB 14 billion. Just a week ago, Dangsheng Technology signed a supply contract with SK On and agreed to supply 17000 tons of various types of lithium positive electrode materials, including high nickel and medium nickel, to SK On from 2025 to 2027.
In addition, both parties will negotiate and determine the cooperation on non binding additional supply and sales of approximately 110000 tons of lithium battery positive electrode materials from 2026 to 2028. In terms of price, ternary cathode materials perform better than lithium iron phosphate cathode materials, and the performance of ternary cathode material companies is also better than that of lithium iron phosphate cathode material companies.
In the future, downstream market applications such as solid-state batteries and large cylindrical batteries are expected to drive the release of high nickel ternary materials.
The reasons for the industry's explosive orders
At the technical level, technologies such as large cylindrical batteries, full pole ears, solid-state batteries, dry electrodes, and composite current collectors are accelerating their maturity, creating opportunities for equipment companies to break through. For example, Yifei Laser Technology has achieved mass delivery of the 46 series large cylindrical full pole ear battery assembly line; Shangshui Smart has created a dry electrode process and equipment solution for customers to address the pain points and difficulties of the polymer fibrosis technology route equipment.
At the market level, as the domestic market becomes further saturated, overseas becomes the main incremental market. At the same or earlier stage as lithium battery and material companies, domestic equipment has undergone a global strategic layout, setting up multiple service centers or production bases overseas, and continuously improving its advantages in nearby supporting facilities.
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