Domestic battery industry shows decentralized scale developments

Currently, domestic battery industry is showing decentralized scale developments in both market share and volumes, denying the past conclusion that “Chinese battery industry is large but weak.”

Battery auto companies represented by BYD and CATL are the best examples. BYD ranked second among all global power battery companies in terms of sales volume, only second to Panasonnic. BYD adopted the closed vertical production model, providing batteries for itself. Besides, BYD has paved roads for expanding its battery businesses by developing alternative energy vehicles, mobile phones and launching “cloud track” plan. Recently, BYD began to readjust its industrial chain to make power battery business independent, as well as supplying products to other auto manufacturers. According to BYD’s 2017 production plan, its annual capacity will reach 20GWh, 2.7 times of the number in 2016.

CATL also has great desire to expand market. It surpasses BYD with the market share of 26%, and it’s also exposed that it has a market valuation of RMB 84b. CATL is the only Chinese company providing power battery systems to foreign passenger vehicle companies and supplying PHEV batteries to multi-national auto companies. CATL has established R&D and sales center in German and France, being able to provide fast and convenient services for the entire European market.

CATL also established cooperative relationships with many domestic auto companies including SAIC, BAIC, Changan, Geely, GWM, South East Motor, Yutong, Higer, King Long, CNHTC and Dongfeng Motor. CATL has established two joint-venture companies with SAIC.

Led by JAC-Volkswagen electric motor, Hefei Guoxuan High-tech power energy Co. Ltd. also develops well by conducting deepening cooperation with BAIC BJEV. Guoxuan High-tech has signed power battery order of RMB 1.33b with Zhongtong Bus, owning many production bases in Hefei, Lujiang, Nanjing, Suzhou, Qingdao, Tangshan and Luzhou. According to plan, it will reach an annual capacity of 6b AH by 2020. Other small battery companies may have smaller market shares and eventually exit the market.