Demand for power lithium batteries, energy storage lithium batteries, and 3C digital lithium batteri

       A lithium battery is a type of battery where the electrode is mainly made of lithium metal or lithium alloy, and the electrolyte is a non-aqueous electrolyte solution. It mainly relies on the movement of lithium ions between the positive and negative electrodes to complete the charging and discharging process: during charging, lithium ions are deintercalated from the positive electrode, embedded in the negative electrode through the electrolyte, and the negative electrode is in a lithium rich state; When discharging, it is the opposite.

       The upstream of the lithium battery industry chain mainly consists of four key materials for lithium batteries: positive electrode, negative electrode, separator, electrolyte, and other auxiliary materials; The midstream of the industry chain includes the production and assembly of lithium batteries, as well as accessories such as battery management systems (BMS) and protection boards; The downstream is its application end. Lithium batteries have many advantages such as high energy density, wide operating temperature range, no memory effect, and fast charging and discharging. Currently, they are widely used in energy storage fields such as new energy vehicles (power batteries), various 3C digital electronic products (3C digital batteries), communication, and power grids.

       In terms of downstream applications in the lithium battery industry, with the rapid growth of demand for lithium batteries in China's new energy vehicles in recent years, the field of new energy vehicles has become the largest consumer terminal for lithium batteries. Meanwhile, with the advent of the 5G era and the gradual development of power grid construction, energy storage fields represented by communication base station energy storage and power grid energy storage have gradually surpassed the digital field, and are expected to bring significant demand growth in the future.

1. Demand for power lithium batteries

       The market space for power lithium batteries is large and growing rapidly. With the improvement of lithium battery production technology, capacity, and performance, power lithium batteries will be one of the main factors for the future growth of lithium battery demand. The main fields of power batteries are new energy vehicles and small power batteries. Due to its high operating voltage, high energy density, long cycle life, light weight, recyclability, and low-carbon environmental protection, lithium batteries have become the main choice for electric vehicle power batteries. In recent years, with the continuous introduction of national strategic plans and measures, electric vehicles have become a national key and encouraged industry for investment and development. Driven by various industrial policies, the domestic electric vehicle industry has developed rapidly.

       According to data from the China Association of Automobile Manufacturers, since 2019, the production and sales of new energy vehicles in China have been on the rise. New energy vehicles have gradually become a highlight of the automotive industry's development, and their market development has shifted from policy driven to market driven, presenting a good situation of dual improvement in market size and development quality, laying a solid foundation for the high-quality development of the automotive industry during the 14th Five Year Plan period.

       In 2023, the production and sales of new energy vehicles will be 9.12 million and 9 million respectively, an increase of 29.60% and 37.75% compared to 2022, both reaching historical highs. The China Association of Automobile Manufacturers predicts that the production and sales of new energy vehicles will reach 11.5 million units in 2024, continuing to maintain a high growth rate. New energy vehicles are the main growth direction of China's automotive industry in the future, and will drive the sustained development of the upstream lithium battery equipment industry.

       At the same time, the technology of new energy vehicle power batteries is constantly breaking through, the industry chain is becoming increasingly mature, and the market penetration rate of new energy vehicles is further increasing. The "New Energy Vehicle Industry Development Plan (2021-2035)" formulated by the State Council and the Ministry of Industry and Information Technology proposes that by 2025, the sales volume of new energy vehicles should reach about 20% of the total sales volume of new vehicles; We strive to achieve the international advanced level of core technology for new energy vehicles in China after 15 years of continuous efforts, and our quality brands have strong international competitiveness.

       Driven by factors such as energy security, greenhouse effect, and air pollution, promoting the development and popularization of new energy vehicles globally, and reducing the sales and use of fuel vehicles, has become an important development trend in the automotive industry. With the policy support of global mainstream automotive powers for new energy vehicles, the increasing improvement of supply chains and supporting facilities, the continuous improvement of consumer acceptance of new energy vehicles, and the continuous advancement of new energy vehicle technology, the sales of new energy vehicles will continue to maintain a high growth momentum in the medium and long term.

       Lithium batteries are the core components of electric vehicles. With the gradual promotion of global electrification, intelligence, networking, and lightweighting of automobiles, as well as the improvement of lithium battery production technology, stable increase in electric vehicle range, and the increasing popularity of electric vehicles and supporting facilities, the demand for power batteries for electric vehicles will continue to grow rapidly in the future. According to the forecast of GGII, the global and domestic shipments of power batteries will reach 1980 GWh and 1425 GWh respectively by 2027.

2. Energy storage lithium battery demand

       The energy storage lithium battery market is an emerging lithium battery terminal market in recent years, with a rapidly growing market size. The main application scenarios of energy storage are grid energy storage, communication energy storage, and household energy storage. In recent years, grid energy storage and communication energy storage have grown rapidly driven by downstream markets, which has driven the demand for high-end energy storage lithium battery industry chain related products to increase year by year. The main growth drivers of the domestic energy storage lithium battery market include the following aspects:

       ① The national policy is gradually strengthening its inclination towards the energy storage field, promoting its development;

       ② Lithium batteries, with their advantages in safety and recyclability, are replacing traditional lead-acid batteries at a faster pace. For example, in the field of communication, new base stations will mainly use lithium batteries;

       ③ The accelerated construction of 5G base stations further promotes an increase in the shipment of energy storage batteries in the communication field, which in turn drives an increase in the shipment of lithium batteries in the domestic energy storage sector;

       ④ Some power battery companies have shifted their production focus to the energy storage field, accelerating the cost reduction of energy storage lithium batteries, which is conducive to enhancing the competitiveness of lithium batteries in the energy storage market.

       Data shows that the shipment of lithium energy storage batteries in China will reach 206 GWh in 2023, and is expected to grow to 410 GWh by 2027. The penetration rate of lithium batteries in the energy storage market, especially in the field of efficient energy storage, will further increase, and the market application space of lithium batteries in the energy storage field is huge in the future.

3. Overview of the 3C Digital Lithium Battery Market

       Since 2015, the market for traditional 3C digital electronic products such as smartphones and tablets has gradually reached saturation and the growth rate has slowed down. However, at the same time, the rise of emerging 3C digital electronic products such as smart homes, smart wearable devices, drones, and wireless Bluetooth earphones has brought new growth opportunities to the 3C digital lithium battery market.

       Data shows that the global shipment of 3C digital lithium batteries in 2023 is 81GWh, and the overall market size has remained relatively stable in the past two years; At present, the upgrading of 3C digital electronic products is accelerating and developing towards lightweight, thin, short, and small direction. The demand for lithium batteries with small size, large capacity, light weight, and high energy density is showing a further rapid growth trend. In addition, the emergence of 5G technology also puts forward new requirements for the battery life and charging speed of 3C digital lithium batteries. Therefore, the demand for 3C digital lithium batteries is expected to maintain a certain degree of growth. It is expected that the global and Chinese 3C digital lithium battery shipments will reach 104GWh and 76GWh respectively by 2027.