Global Lithium Battery Market Competition 'Intensified'

Since the beginning of this year, although the new crown pneumonia epidemic has brought a certain impact on the global sales of electric vehicles, the lithium battery market that powers them has not been calm, and the competition on the supply side has become increasingly fierce. Industry organizations predict that under the anticipation of the rapid increase in the number of electric vehicles in Asia and Europe, the global lithium battery supply pattern may usher in more 'players.' LG Chem’s battery business spin-off and listing In order to further improve the profitability of its battery business, South Korea’s LG Chem recently announced the spin-off of its electric vehicle battery division and will raise funds through an independent IPO, aiming to lay the foundation for obtaining more battery orders. LG Chem stated in a statement that in view of the rapid development of the battery industry and strong profit prospects, it is now the best time to spin off and become independent. From December 1, 2020, LG Chem will integrate its existing battery business to establish a new wholly-owned subsidiary, tentatively named LG Energy Solutions (LG Energy Solutions), and seek independent listing. 'Financial Times' pointed out that LG Chem's move is aimed at consolidating its leading position in the global electric vehicle battery supply market. According to data released by LG Chem, the annual revenue of its battery business this year is about 13 trillion won (approximately US$11.1 billion); and it is expected that by 2024, this part of the revenue will exceed 30 trillion won (approximately US$25.6 billion). . 'We expect that the global power lithium battery market will increase at a rate of 30% per year, and the annual revenue of 30 trillion won is only a conservative estimate.' LG Chem Chief Financial Officer Che Dong Suk said, 'We see the upside potential.' It is known. Since the beginning of this year, the sales of electric vehicles in Europe have risen rapidly, which has directly driven LG Chem’s sales, which is also the main reason for the increase in its market share. However, Yonhap News Agency pointed out that my country's lithium battery manufacturers and suppliers such as CATL are also accelerating the layout of their European business, which has forced LG Chem to speed up its own restructuring. In addition, the new crown pneumonia epidemic has brought great challenges to its capital structure. CATL achieved profits in the first half of the year, while LG Chem was actually at a loss in the first half of the year. my country continues to dominate the supply of lithium batteries. According to the latest 'Global Lithium Battery Supply Chain Ranking' published by Bloomberg New Energy Finance (BNEF), my country quickly surpassed Japan and South Korea, which have been leading the world in the past 10 years, and became the world's largest supplier of lithium batteries. source. BNEF predicts that by 2025, my country will maintain a dominant position in the global supply of lithium batteries. According to data released by the my country Automotive Power Lithium Battery Industry Innovation Alliance a few days ago, in August this year, the installed capacity of my country's power lithium battery was 5.1 GWh, an increase of 48.3% year-on-year and an increase of 2.2% month-on-month. BNEF pointed out that the success of my country’s battery industry is driven by domestic battery demand on the one hand; on the other hand, my country has 80% of the world’s battery metal refining output, 77% of battery cell output, and 60% of key raw material output. Japan and South Korea are inferior to my country in terms of battery metal refining and mining. 'Raw materials, talents and infrastructure are the keys to attracting investment into the industrial chain. In addition to mineral development, my country is also leading the world in metal refining, so it has the advantage of surpassing Japan and South Korea in the battery category.' said Kwasi Ampofo, chief decomposer of battery raw materials at BNEF . Market competition is getting fierce. 'From the perspective of the global market, China, Japan, and South Korea have greater advantages. At least for some time in the future, the global lithium battery will be supplied by these three countries.' Wang Nianju, Executive Vice President of Tianjin Lishen Battery Company Said, “However, the competition on the supply side of the global lithium battery market has become fierce.” It is known that the continuity of the lithium battery supply chain and the importance of carbon emissions are becoming increasingly prominent. How to ensure the production and production of raw materials The use of low-carbon electricity in the battery manufacturing process has become a top priority. In addition, as the demand for new energy vehicles has soared, the demand for establishing battery manufacturing plants in the vicinity of automobile processing sites has also risen. 'In the past 10 years, China has vigorously promoted the development of the battery supply chain, supplemented by incentive policies, and now it is expected to occupy the leading position in the industry.' James Frith, head of BNEF energy storage research, said, 'At the same time, other countries and regions around the world They are also building their own battery supply chains. For example, Europe is increasing the layout of lithium battery processing and manufacturing.' BNEF’s 'Global Lithium Battery Supply Chain Ranking' shows that the rapid development of localized battery supply chains in Europe and strict environment Under the joint promotion of standards, five countries including Germany, the United Kingdom, Finland, France and Sweden have entered the top ten of the ranking. BNEF pointed out that a major focus of many raw material processing countries is how to enter the high value-added link of the value chain. The winning factors in this link include the environmental footprint of the battery industry, low-cost clean power, and skilled labor. And incentive policies to promote the rise in battery demand. 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