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CCM: slowdown in China Li-ion unit output growth signals shift in market structure toward new energy vehicle applications

In 2015, China’s total output of Li-ion batteries increased by 3.13% year-on-year (YoY)—a significant slowdown in the output growth rate from the prior 5 years, according to the National Bureau of Statistics of the People’s Republic of China.

CCM, a leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets, suggests that the reduction in growth rate is a signal that the market structure of Li-ion batteries in China is changing, with Li-ion batteries for alternative energy vehicles moving to dominate China’s Li-ion battery market instead of consumer Li-ion batteries.

Li-ion battery 160314
Output and YoY growth rate of Li-ion batteries in China, 2010-2015. Source: National Bureau of Statistics of the People’s Republic of China. Click to enlarge.

On 3 March 2016, data from the National Bureau of Statistics of the People’s Republic of China (NBS) showed that 5.6 billion Li-ion battery cells were produced in China last year, up by 3.13% year-on-year over the 5.43 billion units in 2014. For the previous 5 years, however, the annual growth rate had averaged 20%, with a low of 12.1% in 2010 and a high of 36.16% in 2012.

However, CCM says that it was not the growth rate of unit output but the growth rate of battery capacity that could reflect the real situation of Li-ion battery industry—most domestic Li-ion batteries for alternative energy vehicles are large-capacity. In other words, capacity can grow faster than unit output.

With the declining of consumer and storage Li-ion batteries, the power Li-ion batteries began to capture the market share thanks to the development of alternative energy vehicles.

In the consumer electronics market, at present, the overall annual output is increasing, although some products witnessed a YoY decline. This led to record weak demand for Li-ion batteries in 2015, CCM said.

1.82 billion mobile phones were produced in China in 2015, up by 3.9% YoY; 175 million notebook computers (including tablet PCs) were manufactured, down by 16.8% YoY; and the output of digital cameras was only 19.227 million, down by 20.4% YoY.

However, Chinese Li-ion battery industry is increasingly being driven by the alternative energy vehicle industry, which began to develop rapidly in 2014. The domestic output of alternative energy vehicles was increasing rapidly, spurred by the national and local governments.

In 2015, the domestic output of alternative energy vehicles was 379,000, an increase of 400% YoY.

The changes of consumption pattern helped increase the market share of alternative vehicle Li-ion batteries in domestic Li-ion battery market. In 2014-2015, the market share of such Li-ion batteries has soared from 13% to 52%, exceeding that of consumer Li-ion batteries, the market share of which has dropped from 83% to 46%, according to CCM.

The change in the applications of Li-ion batteries has also led to polarization in regional distribution.

The top 3 production areas for traditional Li-ion batteries in China are the Pearl River Delta Region (including Guangdong and Fujian provinces); the Yangtze River Delta Region (including Shanghai, Jiangsu and Zhejiang); as well as the Beijing-Tianjin-Hebei Region (including Beijing, Tianjin, Hebei).

Due to the rapid development of alternative energy vehicle market and the industrial transfer, the first region is further strengthening its leading position, while the positions of the latter two are declining. Li-ion battery output in these three areas in 2015 were:

  • Pearl River Delta Region: increased by 20% YoY to 3.04 billion pieces, accounting for 54.3% of the national total. Amongst them, 2.36 billion pieces were from Guangdong Province, accounting for 42.1% of the national total.

  • Yangtze River Delta Region: dropped by 5.2% YoY to 1.09 billion pieces, accounting for 19.5% of the national total. This was mainly due to environmental constraints.

  • Beijing-Tianjin-Hebei Region: dropped by 20% YoY to 440 million pieces, accounting for 7.9% of the national total. This was mainly due to the acceleration of industrial transfer in the region.

In 2016, China’s Li-ion battery market structure is expected to change further. The market share of consumer Li-ion battery will continue to decline while that of [alternative vehicle] Li-ion battery will continue to increase. This is because the consumer electronics market is nearly saturated. The alternative energy vehicle market will maintain the momentum of rapid growth, pushing by the target of consuming 5 million alternative energy vehicles by 2020.

—Stanley Wang, Chief Editor of China Li-ion Battery News

CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. For more information about CCM, please visit www.cnchemicals.com.

Comments

DaveD

The headline in this story was terribly misleading. They are actually increasing "output", just shifting from lots of small cells (consumer electronics) to lots of large cells for transportation.

It would have been much more accurate and gotten just as many clicks to say: "China shifting Li-ion production towards auto segment".

HarveyD

Is the number of cells produced the good yardstick?

Would it be more meaningful to use batteries' total capacity (kWh) or value in $$ instead?

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