Overcapacity in China’s EV battery industry to reach four times demand by 2025, putting small players at risk
- The EV battery capacity of China’s nearly 50 manufacturers will reach 4,800 gigawatt-hours in 2025, four times the actual market demand, according to a forecast
- China’s top 10 battery makers increased their market share to 97 per cent from 96 per cent in May, according to Citi
China’s electric vehicle (EV) battery industry will face severe overcapacity in the next two years, which could lead to the closure of many small players, according to analysts.
Chinese battery manufacturers, which number close to 50, will be able to churn out 4,800 gigawatt-hours (GWh) of batteries in 2025, four times the demand of the country’s EV makers, according to a forecast by mainland online investment publication Gelonghui.
“Every major EV battery producer is quickening their expansion pace to vie for a bigger market share,” said Davis Zhang, a senior executive at Suzhou Hazardtex, a supplier of specialised vehicle batteries. “The reason for the rapid expansion is simple – everyone is eyeing production on a big scale so that they can eventually have an advantage in cost and price.”
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CATL, BYD, CALB, Gotion, Eve Energy and Sunwoda accounted for 62.6 per cent share of the global market from January to May, supplying 148.7GWh of batteries to companies like Tesla and Li Auto, the mainland’s top maker of intelligent electric cars.