context: Global power battery production capacity reached 446 GWh in November 2022, up 75 percent y-o-y, with that of China reaching 258.5 GWh, according to SNE Research. Two companies, CATL and BYD, account for more than half of China's production capacity. Moreover. China accounts for more than 60 percent of the global NEV (new energy vehicle) market and was the second-largest car exporting country in 2022.
With China's EV subsidy policy now history, the power battery industry hopes the demand for higher-quality batteries will emerge and lead to growth, according to Comnews, but an emerging overcapacity is now worrying the industry. Expected demand in 2025 is 1000-1200 GWh while the industry has announced plans totalling more than 4800-gigawatt hours (GWh) capacity. Multiple measures should now be taken simultaneously to coordinate the industry's layout and development, says Wang Xi 王曦 China Electronics Information Industry Development Research Institute Battery Energy Storage Industry Research Office deputy director, noting a need
- to optimise the allocation of resources and avoid vicious homogeneous competition, by
- guiding lithium battery enterprises to more reasonably formulate development goals in light of actual conditions and industry trends
- integrating regional markets and industries and coordinating innovation
- closing down outdated and ineffective capacity
- to encourage cluster-style development and enhance international competitiveness of leading enterprises, by
- relying on the existing industrial foundation, focusing on building advanced power battery industrial clusters with international competitiveness; battery companies must lead, and upstream material companies and related service industries must support them
- guiding the main supply chain enterprises and supporting enterprises to become bigger and stronger
- filling core technology and supply shortcomings and gaps and continue to forge advantages and enhance international competitiveness
- to deepen international cooperation and the global industrial chain, by
- overseas expansion of the local market, strengthening the development and utilisation of overseas resources, constructing battery production bases and market hubs, and encouraging leading battery companies to cooperate with upstream and downstream partners to actively build global industrial chains
- at the same time, by providing support for enterprises in overseas mergers and acquisitions, equity investment and the establishment of R&D centres, building a global marketing service system and improving the level of international development