Battery PACK is the core energy source of the battery. It provides electrical energy for the entire battery. It is also the core link connecting upstream and downstream to realize the transition from "standardization" to "individualization" of lithium batteries, which plays a role in linking the past. The core components of the battery pack are the battery module and the battery management system. The performance of these two parts plays a decisive role in the overall performance of the battery pack. The thermal management system and electrical system of the battery supplement the core components to regulate the working temperature and current of the battery and then pass through the shell to form a battery PACK.
China's Battery Pack Development Status
The battery PACK industry in China has gone through four main stages, namely laptop battery, mobile phone digital battery, smartphone battery, and power battery. In recent years, thanks to the continuous expansion of the demand for terminal new energy vehicles and the support of relevant national policies, the production scale of China's power batteries has increased year by year, which has led to the rapid development of the battery PACK industry. In 2020, the market size of China's battery PACK industry will be 26.1 billion dollars.
The decline of new energy vehicle subsidies has a certain impact on the growth of battery PACK, but the industry is driven by many aspects, and the market scale of China's battery PACK industry will still maintain a relatively high growth level.
Downstream Power Battery Demand Growth
3C batteries and power batteries are the main application markets for battery packs. Among them, the 3C battery market tends to be saturated, and the market growth momentum is insufficient. Power batteries have huge development potential in the future and are an important source of increase in battery PACK.
Power batteries have stronger performance in terms of battery life, capacity and discharge. With the strong support of national policies and the accelerated promotion of new energy vehicles, the output of China's new energy vehicles will increase from 78,000 in 2014 to 1.244 billion in 2019; in 2019, the sales of new energy vehicles were 1.206 million. Looking forward to the future, the production and sales of new energy vehicles in China will continue to increase, the demand for automotive power batteries will greatly increase, and the market demand for power batteries will further increase, greatly expanding the market scale of power battery PACKs, and Promote the progress of power battery PACK production technology.
Foreign Investment Is Conducive to Industry Development
Although China's power battery market started late, the industry is developing rapidly and is currently in a relatively mature stage. Since 2015, benefiting from government policies, increased consumer awareness of environmental protection, and the active layout of major auto companies, China's new energy vehicle market has expanded rapidly, helping the power battery industry to enter a period of rapid development. In 2019, China's power battery output reached 85.4GWh, an increase of 21.4% over the previous year. The technological level of the first-tier echelon companies such as CATL and BYD has been narrowing and the gap between the international first-line level and the industry concentration has been further improved. The industry competition pattern is in a relatively stable state. However, China's demand for high-end capacity of power batteries in 2018 was 50GWh, while the total shipments of the top three companies were only 38.0GWh. This shows that the supply and demand gap is large and high-end capacity is insufficient.
Due to the lack of high-end production capacity, China’s restrictions on foreign investment in China’s power battery-related industry chain are gradually lifted. Foreign participation in China’s new energy vehicle market encourages domestic new energy vehicle manufacturers to improve their R&D level and service quality, which is conducive to healthy competition in the industry.
In-Depth Cooperation Between Battery Cell and Vehicle Companies to Promote Industrial Upgrading
Participants in the various subdivisions of the power battery PACK industry have complementary advantages, and the bundling trend is obvious. Battery cell companies have the ability to produce battery packs and battery management systems at the same time. They have strong comprehensive competitiveness and are the most important players in the power battery pack industry. Automobile companies have insufficient resource integration capabilities. At present, under the background of the decline of subsidies for new energy vehicles, overcapacity of low-end power batteries, and insufficient high-end capacity, battery cell companies and vehicle companies integrate their resources to achieve complementary advantages and jointly create new growth points for interests.
The 3C Battery PACK Industry Is Highly Concentrated, and the Power Battery Track Becomes Wider and Longer
The overall concentration of China's battery pack industry is high, with leading companies occupying most of the market share. In 2019, there were 112 participating companies in the battery PACK industry in China, among which the top 10 market shares totaled 72.6%, of which BYD and CATL accounted for approximately 50% of the market share.
Chinese battery pack companies are mainly distributed in notebook computer battery PACK, mobile phone digital battery PACK and power battery PACK. Among them, the overall concentration of the 3C battery PACK industry is relatively high, and the industry ranked fifth companies occupy more than 70% of the global market. With the shrinking of the downstream notebook computer market and the stability of the mobile digital market, there are fewer new entrants entering the 3C battery PACK market in the short term, and the market competition pattern remains basically unchanged.
The market share of the power battery PACK field is mainly concentrated in battery cell companies, which account for nearly 60% of the market share. In the future, as the scale of China's power battery industry expands and the energy density requirements of power batteries increase, battery cell companies will have significant technical advantages in battery cells and battery management systems, and the industrial advantage of establishing direct cooperation with downstream industries. It is the main force in the power battery PACK industry in the future, and its market concentration will further increase. The production capacity of AVIC Lithium Battery is among the top in the industry, with an annual production capacity of more than 50GWh; CATL is China’s first internationally competitive power battery manufacturer, covering the entire industry chain of batteries, modules, and vehicle battery PACK; BYD has its own electric motor and electric control factory, which is also one of the leading power battery PACK companies in China.
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