In recent times, the financial reports for 2024’s first half from numerous battery enterprises, including Guoxuan High-Tech, EVE Energy, CATL (Contemporary Amperex Technology Co. Limited), and Great Power Energy, have been released. This article delves into the intricate dynamics of the lithium battery industry, highlighting the contrasting performances of these companies, with a particular emphasis on energy storage batteries.
Overview of Industry Performance
After the lithium battery industry returned to a more rational growth trajectory, the imbalance between supply and demand within the sector remains unresolved. Influenced by factors such as declining raw material prices and intensifying price wars, many battery firms experienced concurrent reductions in revenue and profit during the first half of 2024. However, industry leaders continued to operate robustly.
Revenue Declines and Growth
Table 1: Performance Comparison of Selected Battery Firms
| Company Name | Revenue (H1 2024, in Billions) | YoY Change | Net Profit (H1 2024, in Billions) | YoY Change |
|---|---|---|---|---|
| CATL | 166.77 | -11.88% | 22.865 | 10.37% |
| EVE Energy | 21.659 | -5.73% | 2.137 | -0.64% |
| Great Power | 3.773 | -13.75% | 0.041679 | -83.41% |
| Guoxuan | N/A | N/A | N/A | N/A |
| Zhongchuang | 12.46 | 1.4% | N/A | N/A |
| Sunwoda | 23.918 | 7.57% | 0.824 | 87.89% |
Note: Only selected companies are listed here for brevity.
Among these firms, second-tier players like Guoxuan High-Tech, Zhongchuang Aerospace, Beijing VoltCoffer and Sunwoda experienced growth in both revenue and profit. Sunwoda, primarily known for its consumer batteries, recorded the highest revenue and profit, amounting to 23.918 billion yuan, up 7.57% YoY, with a net profit of 0.824 billion yuan, an increase of 87.89% YoY.
In contrast, despite achieving a revenue of 166.77 billion yuan, CATL’s revenue declined by 11.88% YoY, while its net profit increased by 10.37% to 22.865 billion yuan. Firms like EVE Energy and Great Power saw declines in both revenue and profit.
Declining Cell Prices
Industry insiders attribute the decline in revenue to the significant drop in cell prices, which is primarily due to falling raw material prices and intense price competition. According to data from Gaogong Industry Research Institute, as of the end of June 2024, storage cell prices ranged from 0.3 yuan/Wh to 0.35 yuan/Wh.
Great Power noted that while the shipment volume of its storage products increased significantly, the significant drop in selling prices led to a decline in total revenue from the storage business. Notably, large-scale and communication storage saw growth in both shipment volume and sales revenue, while residential storage experienced declines in both.
Rising Storage Battery Business
Despite the challenges, some firms that primarily focus on electric vehicle or consumer batteries reported significant growth in their energy storage battery business.
Table 2: Energy Storage Battery Business Performance
| Company Name | Energy Storage Battery Revenue (H1 2024, in Billions) | YoY Change |
|---|---|---|
| CATL | 28.82 | 3% |
| EVE Energy | 7.774 | 9.93% |
| Sunwoda | 0.595 | 31.49% |
CATL’s revenue from energy storage battery systems reached 28.82 billion yuan, up 3% YoY, compared to a 19.2% YoY decline in revenue from its EV battery systems. Similarly, EVE Energy and Sunwoda also reported growth in their energy storage battery business.
Even amidst price wars, some firms managed to increase their gross profit margins for energy storage battery systems. CATL and Guoxuan High-Tech saw significant improvements in their gross profit margins for energy storage battery systems, reaching 28.87% and 23.87% respectively, compared to the previous year.
Long-term Outlook for Energy Storage Industry
The overall trend for the energy storage industry remains positive. With recent adjustments in material prices, the overall selling prices of energy storage batteries have fluctuated but are now believed to have bottomed out. Firms anticipate an increase in the proportion of energy storage system shipments, with higher unit prices, leading to improved profitability.
International Business Expansion
The first half of 2024 saw a decline in overseas revenue for firms like CATL, EVE Energy, and Great Power due to relatively softer demand in international markets. However, with intensifying competition in the domestic market, overseas expansion is crucial for battery firms.
Table 3: Overseas Business Performance
| Company Name | Overseas Revenue (H1 2024, in Billions) | YoY Change | Overseas Gross Margin |
|---|---|---|---|
| CATL | N/A | N/A | 29.65% |
| Guoxuan | 5.527 | 80.48% | 21.73% |
| Great Power | N/A | N/A | 21.12% |
Faro Energy, while still unprofitable, narrowed its losses significantly, partly due to a shift in focus towards high-quality overseas orders. Firms like CATL, Guoxuan High-Tech, and Great Power maintained higher gross margins for their overseas business compared to domestic operations.
Guoxuan High-Tech reported a significant increase in its overseas business, with revenue reaching 5.527 billion yuan, up 80.48% YoY, accounting for 32.91% of total revenue.
Future Prospects for Overseas Energy Storage Markets
Looking ahead, firms anticipate that the cost-effectiveness of energy storage will become more prominent as major economies in Europe and the United States approach interest rate cuts. North America is expected to experience greater demand elasticity, while Europe’s increasing proportion of renewable energy generation, closed-loop energy storage business models, and improving power trading markets will drive rapid growth in power storage demand.
In conclusion, the battery industry is undergoing significant transformations, with contrasting fortunes among firms. The energy storage battery segment, despite facing price pressures, holds promise for growth, driven by factors such as cost optimization, overseas expansion, and positive long-term industry trends. Firms must navigate these dynamics to capitalize on emerging opportunities and sustain their competitiveness in the global market.