Power battery overcapacity?

Recently, some institutions estimate that by 2025, China's new energy vehicle market needs power battery capacity of about 1000GWh to 1200GWh. At present, the capacity planning announced by battery factories, vehicle factories and other cross-border enterprises has reached 4800GWh, which is more than four times the expected capacity. Many people expressed concern about the power battery planning capacity too much.

According to the statistics of China Automotive Power Battery Industry Innovation Alliance, from January to October 2022, China's power battery production totaled 425.9GWh, an increase of 166.5 percent over the same period last year. Among them, the loading volume is 224.2GWh and the export volume is 105.3GWh. In 2022, the total production capacity of power batteries that have been put into production and are under construction exceeds 1000GWh, which is expected to be more than three times the annual loading volume. Combined with the application demand in the field of export and energy storage, there is no effective overcapacity in China's power battery industry at this stage.

From the planning point of view, China's power battery industry planning high production capacity is a certain reason. First, the rapid growth of global new energy vehicle production and sales has triggered a rapid release of power battery demand, in the context of a significant increase in the marketing objectives of new energy products of automobile enterprises, forcing battery enterprises to accelerate capacity expansion plans to meet the marketing needs of downstream customers. Second, under the strategic layout of seizing more customer resources, battery companies reserve capacity in advance. Third, all localities continue to increase investment in the field of new energy vehicles and power batteries, prompting enterprises to have the power to accelerate the scale of investment in order to win more support. Fourth, battery companies are trying to reduce manufacturing costs and enhance their competitiveness by expanding production capacity. To measure whether the power battery capacity is excess, it is necessary to take the actual production and construction capacity as the main reference, and the planning capacity more reflects the investors' expectations for the future development of the industry. At present, in the case of strong overall demand for power batteries, faster capacity growth is an important guarantee to support downstream demand.

Since the beginning of this year, mainstream power battery enterprises have released a total planned production capacity of more than 3TWh in 2025. At the same time, nearly 30 listed companies have publicly indicated that the cross-border lithium battery industry has announced more than 70 investment plans in the power battery field during the year. Battery enterprises, application enterprises and third-party enterprises have all carried out production capacity layout from their respective perspectives. If economic and social benefits cannot be taken into account, industrial development planning should be made from the overall considerations, there will also be overcapacity in the future.

In order to further promote the sustainable and high-quality development of China's power battery industry, we should take more measures, co-ordinate the layout and coordinated development.

First, optimize the allocation of resource elements to avoid homogenization of vicious competition. Guide lithium battery enterprises to reasonably formulate development goals based on actual conditions and industrial trends, and appropriately expand production scale due to time and needs under the premise of stable supply of key materials, sufficient investment in research and development innovation, and adequate supporting funds; regional market, industrial foundation, and coordinated innovation Ability, capital and talent supply and other factor endowments as the basis, coordinate and coordinate the differentiated and characteristic layout; promote the withdrawal of backward enterprises and ineffective production capacity.

The second is to encourage cluster-based collaborative development and enhance the international competitiveness of leading enterprises. Relying on the existing industrial foundation, we will focus on building an internationally competitive power battery advanced industrial cluster with battery enterprises as the leader and upstream material enterprises and related service industries as the supporting industry. Actively guide the chain main enterprises and supporting enterprises to become bigger and stronger, in filling the core technology gap, fill the key link supply short board at the same time, continue to forge advantages long board, enhance international competitiveness.

The third is to deepen international cooperation and develop transnational business capabilities and global industrial chain systems. Make full use of overseas development opportunities to expand the local market, strengthen the development and utilization of overseas resources, battery production base construction and market development, and encourage leading battery companies to collaborate with upstream and downstream partners to actively build a global industrial chain system. At the same time, we will support enterprises in overseas mergers and acquisitions, equity investment and the establishment of R & D centers, build a global marketing service system, and improve the level of international development.