With the rapid expansion of the new energy vehicle market, the power battery market would develop in a blowout manner in 2022. Data show that in 2022, China's total power battery loading will reach 294.6 GWh, a year-on-year increase of 90.7%. The three companies CATL, BYD and CALB are firmly in the top three in terms of vehicle loading, and continue to expand their leading advantages. It can be seen that the current market share of leading power battery companies in the world is relatively stable, and the concentration trend is becoming more and more obvious.
1. Power battery production and sales doubled
In addition to the year-on-year increase of more than 90% in installed capacity, the production and sales of power batteries in China will also achieve a substantial increase in 2022. The data shows that the cumulative output of power batteries in China will be 545.9 GWh in 2022, a year-on-year increase of 148.5%. The cumulative sales of power batteries reached 465.5 GWh, a year-on-year increase of 150.3%.
From the perspective of technical route, compared with ternary lithium batteries, lithium iron phosphate batteries have shown a stronger growth momentum. In terms of output, the cumulative output of ternary batteries in China in 2022 will be 212.5 GWh, accounting for 38.9% of the total output, and a cumulative year-on-year increase of 126.4%. The cumulative output of lithium iron phosphate batteries was 332.4 GWh, accounting for 60.9% of the total output, a cumulative increase of 165.1% year-on-year.
In terms of installed capacity, the cumulative installed capacity of ternary batteries was 110.4 GWh, accounting for 37.5% of the total installed capacity, with a cumulative increase of 48.6% year-on-year. The cumulative installed capacity of lithium iron phosphate batteries was 183.8 GWh, accounting for 62.4% of the total installed capacity, a cumulative increase of 130.2% year-on-year.
It is understood that during the period from 2018 to 2020, the loading volume of lithium iron phosphate batteries in China was lower than that of ternary batteries. In 2021, lithium iron phosphate batteries achieved a counterattack with a 51% share, and have continued to maintain their lead since then. In December 2022, lithium iron phosphate batteries will hit a record high in a single month with a market share of 68.3%.
The installed capacity of lithium iron phosphate batteries has surpassed that of ternary lithium batteries in essence because of its overall cost performance. At present, lithium iron phosphate, which is cheaper and safer, has gradually become the preferred solution for new energy car companies, and the market share of ternary lithium batteries is temporarily difficult to overtake. However, the popularity of lithium iron phosphate batteries does not mean that ternary lithium batteries have gradually fallen out of favor.
This is a dynamic change. It can only be said that in terms of the current cost of the two batteries, the LFP battery temporarily wins. For electric vehicles, no matter which battery is selected, high energy density, long cycle life, low cost, and high safety are required. With the advancement of technology, power batteries with other technical routes will appear in the future.
2. The pattern of leading power enterprises tends to be stable
On the whole, a total of 57 power battery companies in China's new energy vehicle market last year realized vehicle support, one less than the same period in 2021. Among them, the top 10 carve up nearly 95% of the market share, while the remaining 47 battery companies only compete for the remaining 5%. The competition pattern in the power battery field is gradually concentrated on the head, and the barriers of leading companies still make it difficult for lagging companies to surpass.
CATL has created a relatively closed supply chain, which is difficult for other companies to achieve in a short period of time. Experts said that the top two companies in China currently occupy nearly 70%-80% of the market share. If the follow-up small and medium-sized enterprises have small product demand and high R&D costs and production costs, the gap may widen.
It is worth noting that the combined market share of CATL and BYD will remain stable at around 70% in 2022, which also means that the head structure of the power battery industry will basically stabilize. In addition, looking at it separately, last year's CATL market share decreased by 3.90 percentage points compared with 2021, a slight decline; while BYD increased by 7.25 percentage points.
3. Power battery sounded the alarm of overcapacity
Overall, the growth momentum of power battery data in 2022 is significant. It is worth noting that there will be a difference of 183.3 GWh between the production of power batteries and the installed capacity for the whole year of 2022. If all of these batteries are stock battery products, then the stock batteries will reach about 62% of the total installed capacity of power batteries for the whole year. In contrast, from 2018 to 2021, the difference between China's power battery production and vehicle loading is 13.58 GWh, 23.17 GWh, 19.75 GWh, and 65.19 GWh, respectively.
This has triggered concerns in the industry about the risk of excess capacity. It is understood that the increase in battery inventory is caused by companies running ahead of production at full capacity. Due to the continued boom in the new energy vehicle industry and the rising demand for power batteries, companies are stocking up in advance, which makes the inventory level increase again. In 2022, there will be news of production expansion in the industry one after another, among which second-tier manufacturers are vying for market share in production, and the momentum of production is the strongest.
According to incomplete statistics, since 2022, 44 power and energy storage battery projects have been started, the total production capacity is planned to exceed 1.2 terawatt hours, the planned investment exceeds 430 billion yuan, and 16 power battery projects have been completed and put into production. Compared with previous years, there is also a phenomenon that multiple project bases start construction at the same time. Experts believe that the surplus of power batteries is actually very serious now. The current growth trend of new energy vehicles can probably last for two to three years.
Around 2025 and 2026, it may reach a bottleneck period and turn to the stock market, which means that power batteries will also lose part of their growth. People in the industry generally believe that China's power batteries already have problems of insufficient high-end production capacity and low-end overcapacity. In this regard, the production capacity layout and planning of enterprises need to be arranged based on the needs of downstream customers. At the same time, enterprises need to return to calmness and be alert to the problem of overcapacity caused by blind expansion of production and overheated investment.