Chinese Second- and Third-Tier Battery Firms Look to Gain Market Share
Chinese second- and third-tier battery manufacturers have been ramping up production and accelerating their overseas presence this year, vying for market share alongside first-tier players such as CATL and BYD.
On September 20, Sunwoda announced a new energy battery expansion project with total investment of 21.3 billion yuan ($3.0 billion), which will generate a total capacity of 50GWh of power and energy storage batteries.
According to the announcement, Sunwoda Electric Vehicle Battery, a subsidiary of Sunwoda, will invest in a new energy battery production base in Yiwu, Zhejiang Province to produce cells, modules, packs and battery systems.
This means that the total amount of investment announced by Sunwoda in five days has exceeded 33 billion yuan. On September 15, Sunwoda announced the construction of a 30GWh battery base in Yichang, Jiangxi Province, worth 12 billion yuan.
According to incomplete statistics from Yicai, Sunwoda has built a number of large-scale battery production bases in eight cities, with planned production capacity exceeding 200GWh.
Batteries are the most core component of new energy vehicles. In addition to upstream lithium material, they are the the most profitable link in the current industrial chain. According to the China Association of Automobile Manufacturers, China’s power battery production totaled 50.1GWh in August, up 157.0% year on year, while the power battery loading volume was 27.8GWh, up 121.0% year-on-year.
China’s first-tier battery manufacturers are CATL and BYD, while second-tier battery manufacturers include Sunwoda, CALB, Gotion High-Tech, SVOLT, and others. Despite the large market share and capacity of leading manufacturers, vehicle firms hope to further improve their supply chain by introducing more suppliers, along with the continuous growth in the production and sales of new energy vehicles.
“We believe that from the perspective of global power battery installation, the global pattern may be reshaping,” one new energy vehicle supplier told Yicai. “This year, domestic battery manufacturers have significantly accelerated exploration of overseas markets. Gotion High-Tech, SVOLT, and EVE Energy are growing very fast in Europe.”
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Judging by the pace of production expansion and the scale of financing, second-tier battery manufacturers are showing their determination to seize more market share. During the Chinese government’s 14th Five-Year Plan period, the capacity of CALB is planned to exceed 500GWh. With the goal of reaching 600GWh by 2025, SVOLT recently announced that it will build its second overseas battery factory in Europe. Gotion High-Tech’s 2025 production capacity planning target is 300GWh. As for the continuous expansion of competitors, CATL has publicly stated that the large expansion of production by its peers will not necessarily intensify competition, and only products with innovative material and structural systems are worthy of concern.