How to break the power battery overcapacity?

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 In recent years, the rapid development of new energy vehicles has stimulated the surge of power lithium batteries. Power battery manufacturers continue to expand production capacity, but demand is gradually shrinking, constantly surfacing concerns about overcapacity. Last year’s sales declined from the previous year, and the overall installed capacity of many power battery manufacturers also declined to varying degrees. China’s power battery has appeared in the high-end capacity shortage, low-end capacity overcapacity problem. Power battery demand declined and production capacity is difficult to escape the situation of excess.

According to the CEO of EVE, it is expected that by 2024 at the latest, the whole industry chain will have excess capacity, and the only thing that will not have oversupplied capacity is the battery products of superior quality and low cost. Enterprise capacity layout and planning needs to base on customer demand, do not blindly expand production, and investment overheating brought about by overcapacity. Enterprises must pay attention to product performance and technology, adhere to industry restructuring, and increase product technology innovation. In addition, battery manufacturers only produce batteries with excellent battery performance, good consistency, and a high yield rate will be accepted by customers and have a larger market.

Battery companies in China develop overseas energy storage markets. Battery manufacturers have been building factories overseas, attracting customers, and grabbing orders. In this regard, there is a view that battery enterprises lay out overseas and foreign vehicle enterprises to form a joint relationship, which is conducive to solving the overcapacity, but also caters to the trend of industrial chain globalization. It is worth mentioning that power battery enterprises develop the energy storage industry development.

 Based on the domestic energy storage market, inspire more companies to go overseas to tap the market. From Southeast Asia to India, to Europe and the United States, and even in poor and backward Africa, have seen the figure of Chinese energy storage enterprises. Overseas energy storage development has two major driving forces, one lies in the high price of electricity, and the other lies in the profit model. Major energy storage markets include electric vehicles, lithium batteries and solar cells.

China’s optical energy storage products focus on filling energy gaps, improving energy stability and reducing carbon emissions. But light storage companies want to be based in Europe , the United States and other mainstream markets, must have excellent product power, but also need to be familiar with the policy of each country, the power market, and configure different application scenarios of energy storage solutions.

The U.S. government has introduced energy storage and renewable energy installation subsidy policy, superimposed on the mature business model, significantly stimulate the North American energy storage market. Data from overseas organizations show that the installed capacity of the U.S. energy storage market reached 4.8GW in 2022, and expectes to approach 75GW by 2027.

In September 2022, the United States of America International Solar Power International in California, according to incomplete statistics, more than 70 Chinese enterprises in the field of optical storage were unveiled.2023, hundreds of energy storage enterprises went to Intersolar Europe 2023 in Munich, Germany.2023, China’s energy storage scaled up to full-scale launch of the Overseas market.

It is worth mentioning that power battery enterprises develop the energy storage industry development.
  1. The whole industry chain breaks through the North American market

       As the main global energy storage market, the United States has very high requirements for the quality of products such as inverters and batteries and extremely harsh requirements for energy storage systems.  The enterprises strengthen localization construction and establish strategic partnerships with local developers and integrators to go abroad. Cooperating with foreign policies, the layout of overseas business, consider subsidies but also needs to consider overseas costs and production capacity. Chinese energy storage system enterprises have developed business in North America with technology and cost performance as their core competitiveness. Chinese battery enterprises have obviously advantages in going overseas, and energy storage batteries are developing rapidly in the U.S. market. This year, Chinese battery companies accounted for nine of the top ten global energy storage batteries.

     In March this year, CATL announced that it had reached a 450MWh supply agreement with HGP, a battery energy storage in the project development company, and will continue to promote a 5GWh utility-grade and distributed energy storage project exhibition. In June this year, EVE lithium energy signed a large order of over 23GWh energy storage, including an agreement with a U.S. incorporated energy storage battery solutions with provider Powin, which agreed to produce and deliver 10GWh square lithium iron phosphate batteries.

       2.  European market large-scale storage, household storage development.

The European market, as the most prosperous market for household storage, has attracted more and more Chinese enterprises to enter since 2022; and in the field of large-scale storage, many enterprises are accelerating the breakthrough. It is worth mentioning that in May this year, a domestic household energy storage enterprises and an Italian company will jointly invest in the construction of energy storage factories for the manufacture of energy storage products, marking a breakthrough in the localized production capacity of household energy storage enterprises in the European market.

      3. Southeast Asia has become a popular market

 Southeast Asian countries’ power supply is tight, and the country’s need to develop clean energy power generation is highlighted. For example, Singapore revealed that the country is to 2030 photovoltaic 2GW step forward, so a number of enterprises to accelerate the Southeast Asian market development. Whether it is Europe and the United States mainstream large market, or Southeast Asia small market, China’s energy storage overseas is accelerating the development of production at home, sold overseas.

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