Driven by overseas demand, China’s lithium battery exports have experienced explosive growth since the beginning of this year, and going overseas has become a key factor for many power battery and energy storage enterprises to seek a second growth curve.
Domestic enterprises are investing in energy storage and going overseas
Since the beginning of this year, many industry giants have frequently signed large overseas energy storage orders, and the export value of lithium battery products in China has increased by 58.9% year-on-year. Many foreign trade companies have stated that in addition to traditional European and American countries, the export market for lithium batteries this year has seen significant growth in orders from emerging markets such as South Africa, Nigeria, and Vietnam.
Taking Ningde Times as an example, in the first half of this year, the company’s overseas revenue reached 67.169 billion yuan, which is close to 90% of its total overseas revenue last year, with a year-on-year increase of 195.15%, far higher than its domestic battery business growth rate of 46.10%, accounting for 35.49% of the company’s total revenue during the same period. Another giant in the field of new energy power batteries, Guoxuan High Tech, recently released a performance forecast, stating that the company’s revenue increased by 62.08% -85.23% year-on-year in the first half of this year. “This is mainly due to the gradual production of new production capacity, further strengthening of supply capacity, and strengthening of domestic and foreign market development capabilities and strategic customer maintenance. The customer structure continues to be optimized and improved, especially in the international market
In addition to confirming the performance of top battery companies, data on exports of power batteries and other products also support the rapid growth of Chinese enterprises’ exports. Data shows that in the first half of this year, China’s export of power batteries reached 56.7GWh. Among them, the export of ternary batteries is 39.4 GWh; Lithium iron phosphate battery exports 17.2GWh. In addition to the well-known concept of power batteries going overseas, the energy storage field is becoming a new track and growth point for domestic battery companies going overseas.
Ningde Times revealed that during the European energy storage industry event in June this year, the company has signed cooperation agreements with its international customers for over 40GWh energy storage batteries in the coming years. In the same month, Yiwei Lithium Energy also signed supply agreements with Powin and American Battery Solutions (ABS) for 10GWh and 13.39GWh square lithium iron phosphate energy storage batteries, respectively. In early August, Vina Energy, a lithium battery manufacturer under Aoyama Group, officially reached an exclusive supply agreement for an 8GWh large-scale energy storage project in Jakarta, Indonesia.
Driven by weak power networks, high electricity prices, and policies such as carbon neutrality, the demand for energy storage batteries in overseas markets is more urgent, and the market capacity is very large. As related enterprise products, technologies, and services gradually gain recognition from overseas energy storage customers and gradually win orders, China’s power+energy storage exports are expected to open up new growth space.
The New and Old Forces of Energy Storage Battery Circle
According to incomplete statistics from the CNESA DataLink global energy storage database, the new installed capacity of new energy storage in China reached 8GW from January to June this year, exceeding the new capacity of the entire year last year; It is expected that the newly installed capacity of new energy storage will reach 15GW-20GW throughout 2023, exceeding the cumulative installed capacity of the past decade.
Under the enormous market potential, energy storage batteries are becoming a “must-have” in the industry. As an upstream link in the energy storage industry chain, occupying a 60% -70% share of the energy storage value chain, mastering batteries to a certain extent holds the “password” for energy storage cost reduction. In addition, under the trend of optical storage integration, energy storage batteries are crucial for the greater value of new energy generation and assisting in the construction of new power systems. With the increasing value and importance of energy storage batteries, the number and types of enterprises entering the energy storage battery industry have also reached an unprecedented scale.
The organization GGII categorizes players in the energy storage battery market into four categories. One category is the entry of power battery companies into the “energy storage battery race”, with similarities in manufacturing processes between the two; The second type is the cross-border production of energy storage batteries by photovoltaic players; The third category is the newly emerging “new power” enterprises of energy storage batteries, including Haichen Energy Storage, Baofeng Group, Chuneng New Energy, Shenghong Energy, Sany Lithium Energy, etc. Many of them are powerful industrial groups that have crossed borders from other energy tracks; The fourth category is some “veterans” in the field of energy storage batteries, who entered the local energy storage field earlier and gradually upgraded energy storage batteries to their main business.
With the influx of new energy storage battery forces, including Haichen Energy Storage and Chuneng New Energy, into the energy storage track and obtaining a large amount of production capacity in a relatively short period of time, a fierce price war has also emerged behind the booming development. Not long ago, Dai Deming, Chairman of Chu Neng New Energy, publicly stated that by the end of this year, 280Ah energy storage lithium batteries will be sold at a price of no more than 0.5 yuan/Wh (excluding tax), a year-on-year decrease of about 40% in cost. Industry insiders say that a non tax price of 0.5 yuan/Wh is a loss for some battery factories.
At present, multiple top battery manufacturers in the market have taken the lead and started selling at 0.5 yuan/Wh (equivalent to tax inclusive price of 0.565 yuan/Wh). Moreover, if the procurement volume is large, there can be further discounts.
Besides price wars, overcapacity has become another concern. Analysts point out that market demand cannot keep up with the speed of production expansion, and manufacturers with new production capacity this year are facing significant sales pressure. In addition, an intuitive manifestation of overcapacity is that the current capacity utilization rate of domestic battery companies is generally not high. According to data from GGII, due to active industry expansion, the current domestic energy storage battery production capacity has exceeded 200GWh, and the overall capacity utilization rate has decreased from 87% in 2022 to less than 50% in the first half of this year. Among them, the household battery capacity utilization rate is less than 3% in Chengdu.
The global energy storage battle
Energy storage, as an indispensable part of the entire new energy industry chain, especially with its outstanding growth potential, has become a hot spot in the eyes of global new energy giants.
Taking the United States as an example, as an important pole in the global energy storage market, it mainly focuses on large-scale energy storage and is driven by factors such as policies, markets, and technology. In this market, players such as Tesla, LG New Energy, Fluence, SolarEdge, and Enchase have emerged.
Among them, in March of this year, LG New Energy was announced to invest 3 trillion Korean won to build a battery production plant in the United States for ESS (Energy Storage System), to produce LG New Energy’s self-developed soft pack lithium iron phosphate batteries. The expected total production capacity is 16.3 gigawatth, and large-scale modular production is planned to begin in 2026.
While domestic energy storage companies are accelerating their pace of going overseas, they also need to face competition from overseas new energy companies. In the future, with the promulgation of relevant policies and the increasingly mature business model of energy storage, the entire industry will accelerate its transition from “cost competition” to “value competition”.