New energy development prospects are good, domestic power battery demand will reach 100GWh in 2020.

With the rise of new energy vehicles, China's power battery industry has entered a period of rapid growth since 2014. Shipments increased from 3.7GWh in 2014 to 30.5GWh in 2016, with a compound growth rate of 288%. In 2017, due to the decline in new energy subsidies, the growth rate of power battery shipments dropped to 19%, and the annual shipments were 36.2GWh.

Data show that as of the end of 2017, the total domestic power battery capacity reached 135GWh, effective capacity of 110GWh, while the annual power battery shipments were only 36.2GWh. The average capacity utilization rate was less than 40%. Estimated by the capacity utilization rate of leading enterprises up to 80%, the capacity utilization rate of some SMES is only 10%, and the low-end capacity overcapacity is obvious. In the next two years, first-line battery manufacturers still have new capacity. It is expected that the total power battery capacity will reach 206GWh and 285GWh in 2018 and 2020 respectively. The demand for power batteries will be 47GWh and 97GWh respectively. The technology is backward and lacks stable vehicle customers. The small capacity will be eliminated.

In November 2016, the Ministry of Industry and Information Technology issued the "Regulations for Automotive power battery Industry" (2017) (draft for comments), which greatly increased the annual production capacity of lithium-ion power battery cells from 0.2GWh to 8GWh. Now there are only 5 companies. To meet the production capacity standards, it is estimated that the production capacity of 14 companies will reach the standard in 2020. In 2017, the number of power battery companies declined for the first time, and the effect of small capacity clearing appeared. Under the background of lower prices and under pressure, SMES are difficult to expand production. It is estimated that the domestic demand for power batteries will be about 100GWh by 2020, and there will be no more than 20 power battery manufacturers.

More than 90% of the global power battery capacity is concentrated in China, Japan and South Korea. Japan has been investing in lithium battery research since the 1990s. Korea has followed suit in the 21st century and China has been in the past two years. Japan's Panasonic, South Korea's LG Chemical and Samsung SDI have basically monopolized the supply of power batteries for Japanese, Korean, and European and American mainstream car companies. Because of technological advancement and policies, China's new energy vehicle sales increased rapidly to 49% of the total global new energy vehicle sales in 2017, driving the rapid growth of upstream power battery production and sales. Among the top ten global power battery sales in 2017, domestic companies accounted for seven seats, with a combined global market share of 47%. Among them, CATL power battery sales of 11.82GWh, the global market share of 17%, beyond Matsushita Electric became the world's largest power battery manufacturer. In addition to supplying domestic OEMs, Chinese companies are beginning to seek cooperation with world-class automakers. CATL has entered the BMW and Volkswagen supply chains and competes directly with Japanese and Korean companies in the international market.

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