In recent years, the survival competition in China's rapidly growing battery industry has intensified. As a few major companies like CATL and BYD increase their market dominance, small and medium-sized enterprises with deteriorating revenue are beginning to sift through the wheat from the chaff.
According to the industry on the 30th, several domestic battery companies have reportedly received offers to acquire equity from small and medium-sized Chinese battery companies. This is interpreted as an attempt to dispose of essential assets such as raw materials and production facilities at low prices due to worsening local management conditions.
While the scale of the Chinese battery market continues to grow steadily, the situation is becoming increasingly narrow for companies outside of CATL and BYD. Last year, the battery installation amount in China reached 548.5 gigawatt-hours (GWh), a 41.5% increase from the previous year, with the combined market share of CATL and BYD exceeding 70%.
Locally, the price competition among small and medium-sized enterprises has reached its limit, raising concerns about large-scale restructuring. It is analyzed that at least companies like EVE Energy and Sunwoda, which have a certain scale, are shifting their focus to commercial vehicles, hybrid electric vehicles (HEVs), and other areas in response.
Earlier, LG Energy Solution absorbed about 20 personnel from the Chinese battery company JEVE in March of this year. JEVE, once dubbed "the second CATL," has ceased production and entered liquidation in 2023 due to worsening revenue. Those who were in charge of research and development (R&D) at JEVE are currently reported to be conducting lithium iron phosphate (LFP) related R&D at the LG Energy Solution Nanjing plant.
Earlier this year, the Chinese lithium battery material company Shanshan Group entered corporate rehabilitation procedures (court management). This resulted from a combination of deteriorating battery market conditions and disputes over management rights. Shanshan Group focuses on battery anode materials and polarized films, having recorded the second-highest global anode material shipments last year, totaling 340,000 tons.
Despite the government's active support, China's electric vehicle industry continues to undergo restructuring amidst oversupply and price competition. The number of Chinese electric vehicle startups and corporations, which exceeded 500 in 2018, has decreased to about 100 as of April this year.
Last year, the Chinese premium electric vehicle brand Hiphi stopped production due to management difficulties, and companies like Byton and WM Motors also went bankrupt. Global experts estimate that by 2030, only about 50 Chinese electric vehicle companies will survive.
There are concerns that the Chinese electric vehicle industry could experience a second Evergrande crisis due to excessive bleeding competition. Evergrande was a real estate company that caused a slowdown in China's economy after imploding due to reckless investment and expansion. Some Chinese electric vehicle companies continue to engage in extreme discount competition despite worsening financial conditions.