Growth in demand for lithium battery equipment in China

With the lithium batteries are widely used as UPS lithium battery, wheelchair batteries, lithium RV battery, high voltage battery, etc., the demand for lithium battery production equipment also increases.The survey shows that China’s demand for lithium battery production equipment in 2021 will increase by 100.3% year-on-year, reaching 57.5 billion RMB. There has been explosive growth, mainly due to:

Power market

The expansion of Chinese power battery companies is accelerating

In 2021, thanks to the explosive growth of the new energy vehicle market, the continuous expansion of power battery companies will boost the size of the lithium battery equipment market.

China’s mainstream power battery companies represented by CATL, BYD, China Innovation Aviation, Honeycomb Energy, etc. are accelerating their production expansion. Among them, CATL will increase the production capacity of lithium batteries by 58.2 billion in August 2021.

Reflecting the confidence of leading companies in the high prosperity of new energy vehicles in the future, other battery manufacturers have announced their own production expansion plans, which together have led to an increase in the demand for lithium battery equipment.

Some Chinese equipment companies have entered the battery supply chain of other countries

With the rapid development of China’s new energy vehicles, the technical level of China’s lithium batteries and lithium battery equipment has been continuously improved, and the substitution of domestic production has been continuously improved.

Gradually enter Japan and South Korea and other overseas battery supply chain systems, such as Pioneer Intelligence, Yinghe Technology, Hangke Technology, Times Hi-Tech, etc. Battery companies represented by Panasonic and LG Chem have accelerated the pace of globalization, boosting the rapid growth of some domestic lithium battery equipment companies.

The layout of China’s lithium battery companies will further promote the growth of the lithium battery equipment market

With the acceleration of electrification in Europe, a group of Chinese lithium battery companies with the ability to “go global” have successively established factories in Europe.

For example, CATL, SVOLT, Funeng Technology, and Weihong Power have all settled in Germany. In addition to providing their European customers with nearby supporting services, they have also improved the level of international competition and boosted the growth of lithium battery equipment.

Digital market

3C digital market

Driven by the terminal market demand represented by TWS, smart wearables, 5G mobile phones, etc., the demand for digital battery production expansion represented by ATL and Zhuhai Guanyu in China has increased, which has led to an increase in the market demand for upstream lithium battery equipment.

Power tools market

The market of power tool batteries (including sweeping robots and other fields) has been transferred to China by the industrial chains of other countries. International power tool giants plan to introduce local supply chains. China’s battery companies represented by EVE and Haistar are gradually entering the international supply chain (such as TTI). , Bosch),

At the same time, affected by other epidemics, consumers’ demand for wireless power tools has increased, which has driven terminal enterprises to increase the production of wireless power tools, which has indirectly led to an increase in the demand for lithium battery equipment.

Small power market

Driven by the substantial growth in sales in the electric two-wheeled vehicle market and the obvious trend of lithium-ion batteries for two-wheeled vehicles replacing lead-acid, the rapid growth of China’s small power market in 2021 will further drive the demand for upstream lithium-ion battery equipment.

Energy storage market

With the rapid development of China’s lithium battery industry, technology changes and large-scale effects are obvious, resulting in a continuous decline in the cost of lithium-ion batteries. At present, lithium battery energy storage applications have certain cost advantages. With the gradual maturity of energy storage application scenarios,

The global lithium battery energy storage market is rapidly increasing, which further promotes the growth of the application market scale, and gradually replaces the market share of other energy storage technologies, directly driving the increase in demand for lithium battery equipment.

In addition, in 2021, China Mobile and China Tower’s 5G base station lithium battery tenders will speed up the development of lithium batteries in the energy storage market.

Relying on comprehensive strength and leading advantages in winding, liquid injection, assembly, module/PACK and other links, Pioneer Intelligence firmly occupies the leading position in the equipment industry; Yinghe Technology also has strong competitiveness in the coating machine, winding machine and other markets, and is in the first echelon of the industry.From the perspective of the market competition pattern, because lithium battery equipment involves many links, there are many participating companies, and the leading companies in each link are also different.

Lyric Robot relies on its advantages in the field of volume separation and chemical formation. Currently, the product line is expanding to the middle and front sections, and it is expected to hit the first echelon of the industry; Some companies such as Sikeqi, due to the close cooperation with leading power battery companies, have steadily increased their position in the module/PACK market.

In 2021, the national market share of its module/PACK business has reached 12.31%. In the future, driven by the capacity expansion of leading battery companies, the market share is expected to further increase. In the coating machine segment, the market share of Yuchen Intelligence, which is mainly engaged in coating machines and liquid injection machines, in the coating machine market has increased from 34.15% in 2020 to 45.71% in 2021, further consolidating its leading position in the market segment.

It is predicted that China’s lithium battery equipment market will show the following characteristics

Power battery companies accelerate production expansion

The expansion of power battery companies is accelerating, and the lithium battery equipment market will maintain a high growth trend. The development goals of new energy vehicles in various countries and regions around the world are clear. In order to cope with the rapid growth trend of the new energy vehicle market, the global mainstream lithium battery companies have a clear willingness to expand production.

According to incomplete statistics, in 2021, there will be 63 power battery investment and expansion projects in China (including fundraising projects), with a total investment (including planned investment) of more than 621.8 billion yuan, and the long-term planned new capacity has exceeded 2.5TWh.

From the perspective of specific capacity planning, leading companies have large-scale expansion plans, such as CATL, CALB, and SVOLT, whose lithium battery capacity plans in 2025 have all exceeded 500GWh. Driven by the strength of battery companies, the demand for lithium battery equipment will further increase. It is expected that China’s lithium battery equipment market will maintain a high growth trend in the next few years.

Some Chinese enterprises will fully enter the global supply chain system

China’s current lithium battery equipment technology has basically reached the world’s leading level, especially in the middle and late stages of the equipment field. The current technical level of Chinese enterprise Hangke Technology has led domestic enterprises and is comparable to the level of foreign excellent enterprises.

In the future, with the increase in the localization rate of lithium battery equipment in various fields, the reduction of production costs, and the improvement of equipment consistency and yield due to the delivery of the whole line, China-made lithium battery equipment will have absolute competitiveness in the global market.

In addition, as Europe has become another important market for global new energy vehicles, mainstream power battery companies such as CATL, LG Chem, Samsung SDI, and SVOLT are accelerating the European market layout.

This further promotes the increase in the market demand for lithium battery equipment, so that Chinese lithium battery equipment companies will gradually enter the markets of other countries and enter the global supply chain system in the future.

Market concentration will increase

Mergers and acquisitions of lithium battery equipment companies will increase, and market concentration will increase. China’s high-quality lithium battery equipment companies have in-depth cooperation with head battery companies, and the market concentration of lithium battery equipment is expected to further increase, and market competition will further intensify.

Equipment companies improve the company’s lithium battery equipment business and enhance the company’s overall competitiveness through mergers, acquisitions, and introduction of strategic investors.

Such as the acquisition of Zhuhai Titan by Pioneer Intelligence, the acquisition of Haoneng Technology by Keheng, the introduction of Shanghai Electric as a major shareholder by Yinghe Technology, the acquisition of Dingli Intelligence by Kerui, and the proposed acquisition of Xinpu Automation by Hansoh.

Mainstream companies speed up the binding of lithium battery equipment companies

With the accelerated expansion of power battery companies, the supply of lithium battery equipment resources is in short supply, so that mainstream companies such as CATL and BYD are deeply bound to domestic lithium battery equipment companies through various methods such as capital investment or long-term orders.

Among them, CATL invested in Pioneer Intelligence and subscribed for Nebula shares and other companies; BYD strategically invested in Rongjie shares, etc. The deep binding between battery companies and lithium battery equipment companies can not only jointly develop customized products, but also improve the quality of battery products through cooperation to meet the needs of the current market.

The update of lithium battery equipment will generate a certain demand

The update cycle of lithium battery equipment is roughly five years. With the continuous iterative upgrade of lithium battery equipment technology, the lithium battery equipment products put into production in the early stages are difficult to meet the existing market demand in terms of production efficiency, product consistency, and stability. In particular, leading battery companies have fast depreciation of equipment and strong demand for future renovations.

The energy storage market will be another growth point for future lithium battery equipment

With the outbreak of the global energy crisis, the advancement of the “dual carbon” goal and the growing demand for green electricity, the market demand for energy storage has also increased significantly. Since 2021, the global energy storage capacity has grown significantly, and the energy storage industry in many regions of the world has entered a stage of explosive growth.

Lithium batteries have the advantages of flexible installation, wide application range and long service life in the field of energy storage. The superimposed energy storage market is gradually becoming standardized, and the future market demand has great potential.

According to survey statistics, the global energy storage lithium battery industry shipments will reach 70GWh in 2021, a year-on-year increase of 159.26%. It is expected that the global energy storage lithium battery industry demand will reach 460GWh in 2025, and the compound growth rate will reach 60.1% in 2021-2025, which will directly drive Development of upstream lithium battery equipment.