Global demand for new energy vehicles (NEVs), including battery electric vehicles (BEVs), plug-in hybrids (PHEVs), and hybrids, experienced significant volatility in the first half of the year. Growth momentum lagged behind previous years, affecting the performance of lithium-ion battery manufacturers. Yet, among the top 10 global players, Chinese firms have outpaced their rivals.
Data from South Korea's SNE Research reveals that in the first half of the year, China's CATL led the global rankings with a 30% year-over-year increase in traction (power) battery shipments, followed by BYD at 22%. South Korea's LG Energy Solution (LGES) and SK On posted modest gains of 5.7% and 5.4%, respectively, while China's CALB surged by 35%.
Samsung SDI grew by 17%, while Japan's Panasonic saw a 25% decline. Other Chinese players, including EVE Battery, Gotion, and Sunwoda, recorded growth rates of 38%, 19%, and 62%, respectively, underscoring the stronger momentum of Chinese battery makers compared to their South Korean and Japanese counterparts.
Industry insiders point to the significant influence of export markets on each company's performance. Panasonic, focused on North America, is grappling with weak demand, prompting capacity reductions, with major clients including Tesla's US operations. South Korea's leading battery makers—LGES, SK On, and Samsung SDI—are similarly affected by sluggish BEV demand in Europe and the US.
Additionally, Japanese and South Korean battery makers primarily produce ternary batteries, known for their longer range but higher costs. They have limited exposure to the more cost-effective LFP batteries, which has hindered their ability to compete in the mid-to-low price segments of the EV market in Europe and the US.
In contrast, Chinese battery manufacturers dominate the LFP market, supplying over 90% of the global demand. Their economies of scale and competitive edge have allowed them to maintain solid growth, particularly as they cater to China's robust BEV and PHEV market—the largest in the world. These firms are also making significant inroads into European and American markets with their LFP offerings.
Despite a slowdown in BEV growth in China in 2024, the market is being bolstered by a surge in PHEV sales, which has somewhat reduced overall lithium battery demand per vehicle. Nevertheless, the NEV market still boasts an annual growth rate exceeding 30%.
China's auto market price wars, now in their second year, have put downward pressure on margins for key component suppliers, including lithium battery makers. This has driven leading Chinese firms to aggressively pursue overseas markets, with Europe emerging as the most crucial battleground. However, second and third-tier manufacturers are struggling under the dual pressures of price competition and global expansion challenges.
Industry observers note that the slowdown in BEV growth across Europe and the US has led automakers in these regions to scale back investments, stalling or even halting the expansion plans of their closely tied South Korean battery suppliers.
Looking ahead, Europe and the US remain committed to localizing lithium battery production and securing upstream mineral resources, wary of their current heavy reliance on Chinese suppliers.
