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CATL holds major market share
The global power battery market is undergoing a profound change, and Chinese enterprises are gradually emerging. Led by the Catl, Chinese battery manufacturers have occupied a pivotal position in the European market, and despite the challenges in the US market, Chinese batteries are also increasingly integrated into the global supply chain through joint ventures with Japanese and Korean companies. Data show that as of the first half of 2024, the global market share of CATL has reached 37.8%, which has increased from the past, excluding the domestic market, its overseas proportion is 27.2%.
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In terms of technological innovation, the use of lithium iron phosphate batteries in the European market has just started, but it has shown strong profit potential. The Renault and Volkswagen cases show that the first models equipped with lithium iron phosphate batteries significantly improved terminal gross margins. At the same time, the 4C fast charging technology of CATL has been widely used in China, and the installed number of vehicles is expected to reach 300,000 in 2024, and the introduction of overseas markets is also continuing to advance.
In terms of policy, the European market is facing sales pressure in the short term due to the withdrawal of subsidy policies. However, it is expected that by 2025, with the strengthening of carbon emission assessment, the new energy vehicle market will usher in a recovery. At the same time, in the US market, the penetration rate of electric vehicles is improving, but Chinese enterprises still need to find a breakthrough in the adjustment of the supply chain to grasp the future market increment.
In terms of company performance, CATL's share in the domestic market has gradually stabilized, with a market share of nearly 46% in the first half of 2024, and more than 60% after excluding BYD. The company's full-year output is expected to reach 500GWh. LG New Energy and Samsung SDI faced profit pressure in the second quarter, especially LG New Energy, operating losses are becoming more serious, but still actively layout new technology and the US market.
Resource layout is a major advantage of Chinese battery companies, CATL in the layout of cobalt nickel and lithium resources is becoming more mature, laying the foundation for its strong supply chain. Guoxuan High-tech and Yi Weil Lithium Energy in the material link to achieve vertical integration, Japanese and South Korean companies through long-term agreements to ensure the supply of resources, LG new Energy and Samsung SDI in the market is very strategic layout, showing a strong competitive ability.
China becomes core supplier of the battery industry
China's battery industry has experienced a wave of brilliant development from 2017 to 2020, and now the fate of major car companies is very different. Especially in the European and American markets, the status of Chinese batteries is rapidly improving, gradually promoted from "B corner" to "protagonist".
For example, with Stellantis' new STLA platform and CMP2 platform, Chinese battery manufacturers have become core suppliers. In contrast, American enterprises lag slightly in the process of supply chain platform, while Korean battery companies once dominated in the early stage, and the living space of Chinese enterprises is relatively limited.
The supply chain systems of Japanese and Chinese autonomous car companies have also undergone adjustments. Through the analysis of the order announcements of various companies, Chinese batteries entered the Japanese and Korean markets in the form of CTP, mainly relying On joint venture electric vehicle platforms, such as the cooperation model between EVE Energy and SK On.
In the supply chain of Chinese auto companies, CATL and some Tier 2 companies used to be the main battery suppliers, but since 2024, Geely and other companies have gradually begun to lay out their own battery factories. The shift marks a bigger market share for China between its own and European carmakers.
The Catl has made significant progress in Europe, but is still in the introduction phase on Volkswagen's MEB and upcoming SSP platforms. At the same time, Tier 2 battery companies such as Guoxuan Gaoke and EVE Energy have also won core orders from General Motors in the United States and BMW in Europe.
In the Chinese market, CSIA has made breakthrough progress and successfully built a new supply chain layout. According to the latest data, the share of CATL in the overseas market has reached 37.8%, an increase of about 2.13 percentage points over the same period last year, showing a strong growth momentum.
However, LG New Energy's global market share fell to 12.9%. If the Chinese market is excluded, CATL' overseas market share is about 27.2%, maintaining a stable state, while LG New Energy's external growth is weak. Although the total installed battery capacity of CATL continues to rise, its market share growth is not as expected, limited by the first round of battery supply chain changes to obtain large platform orders are relatively limited.
In addition, the continuous introduction of new technologies, especially the widespread application of lithium iron phosphate batteries in the European market, has had a significant impact on the profitability of the market.
For example, Renault's Dacia Spring has achieved a profit transformation after replacing the lithium iron phosphate version of the CATL, and the Volkswagen ID3 has successfully exceeded 15% after replacing the soft package teryuan version of LG New Energy. This reflects the progressive importance of lithium iron phosphate technology in the European market, especially in the face of A0 and A class vehicles, and the successful practice of this technology will point the way for future battery technology introduction.
The implementation of the carbon credits system sparks a boom in the entire industrial chain
The new energy automobile industry is in a fierce transformation, and the new carbon emission assessment regulations in 2025 will become the key to the transformation of major automobile enterprises. Next year, with the implementation of the carbon credits system, companies' coping strategies will become the focus of attention. It is expected that in the European market, this policy may trigger a boom in the entire industrial chain.
The third phase of the carbon emission assessment is scheduled for 2025, and its core change is that super credits for new energy vehicles are no longer allowed. This means that even if enterprises increase the production of new energy vehicles, they will not be able to obtain more concessions in the overall carbon emission assessment.
In the past, the 2020-2022 assessment allowed carbon emissions to be equalized through a technical measure of 1.67 or 1.33 vehicles, but the situation will be very different today.
At the same time, the new ZLEV incentive scheme will promote the sale of zero - and low-emission vehicles. With the penetration of more advanced energy vehicles such as BMW and Daimler Group, ZLEV's top penetration rate has exceeded 25% due to its innovative plug-in hybrid and pure electric models. This gives them a competitive advantage in next year's carbon emissions test.
According to the current industry forecast, the achieved sales of new energy vehicles in 2025 will be close to 4.4 million, although this figure is based on specific model assumptions, but reflects the basic trend of the market. This stage is expected to witness an increase in both the penetration rate and the total volume of new energy vehicles.
However, the rapid growth of traditional fuel vehicles cannot be ignored, especially driven by strong hybrid models, and the rise in sales may lead to the impact on the market share of new energy vehicles. In order to cope with the increasingly stringent carbon assessment, major car companies are also seeking cooperation, such as Honda's cooperation with Tesla and Jaguar Land Rover to share carbon emission points.
At the international level, the launch of new models by companies such as BMW, Strangis and Volkswagen will provide more order opportunities for Chinese battery suppliers. At the same time, as the penetration rate of electric vehicles in the US market continues to increase, Tesla, General Motors and Ford are actively laying out new models.
In the meantime, companies such as CATL may find new opportunities in the US market through innovative models. After 2025, the battery supply pattern will form a new regional distribution, and for Chinese battery companies, the European market still contains huge development potential.
Intense competition among lithium battery manufacturers for market share
The lithium battery market is undergoing a profound reshaping. Faced with the expansion of the US market, Chinese battery manufacturers are trying to compete for more market share. The recently released report shows that the dynamics of domestic and foreign battery companies are concerned, including short-term scheduling adjustment and strategic changes of Japanese and Korean companies which both try to prolong the lithium ion battery life and quality.
From the perspective of market trends, CATL showed signs of stable recovery in the first half of 2024. The key to its success is to supply core projects such as Ideal, Celis, Avita, polar Krypton and millet, and even if Ideal introduces other suppliers, it has not changed its domestic dominance.
According to the data of the Automotive power battery Industry Innovation Alliance, after excluding BYD's influence, CATL's share of the domestic market in the first half of this year was close to 46%, up 2.8 percentage points from the end of 2023, and after removing BYD, the company's market share exceeded 60%, an increase of more than 1.8 percentage points. The stability of the market in the CATL has dispelled the concerns of the past.
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In terms of production, the production schedule of CATL also showed strong growth in August and September, which is expected to reach 48GWh in August and 50GWh in September, with a month-on-month growth rate of more than 4%.
This data echoes the growth rate of the midstream industry chain such as electrolyte and cathode materials. In addition, the company's annual production schedule has been adjusted to more than 500GWh, especially in the field of commercial vehicles and overseas energy storage system a high cash rate is shown.
To the overseas market, the current profit situation is not optimistic. Since the volatility of global raw material prices in the first quarter of 2023, the average selling price (ASP) of the battery market has declined, resulting in a slowdown in the revenue growth of Chinese and Korean enterprises, especially the Korean enterprises in the second quarter.
Although revenue in the first half of the year was down more than 11 per cent year on year, it rose 9.1 per cent in the second quarter. Companies in Japan and South Korea are facing a double whammy from weaker demand in Europe and falling raw material prices. LG New Energy stabilized slightly due to the advancement of North American projects, while Samsung SDI and SK On struggled in the sluggish market.
Conclusion
The application of lithium iron phosphate batteries is beginning to show profit potential, opening up new opportunities for the future development of companies such as CATL. At the same time, with the implementation of the new carbon emission assessment regulations in 2025, the new energy vehicle market is expected to usher in a recovery, which will further promote the growth of battery demand.
Despite the current complex market environment, Chinese battery companies are expected to continue to expand their market share in the future competition with their technological advantages and market layout.
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