On November 15th, China and the United States collaboratively issued the Sunnylands Statement to Enhance Cooperation in Addressing the Climate Crisis. This declaration underscores the shared acknowledgment between both nations that the impact of the climate crisis on global countries is growing significantly. China and the United States reaffirm their commitment to collaborating and partnering with other nations to tackle the challenges posed by the climate crisis.
In recent times, China has experienced a rapid surge in the export of new energy vehicles, lithium batteries, and photovoltaic products. However, with the introduction of bills such as the IRA and Critical Raw Materials Act, the low-carbon aspect has become integral to China's lithium battery exports.
Exportation has emerged as a new focal point for domestic lithium-ion battery enterprises, with low-carbon development playing a pivotal role. This year, the lithium battery industry has witnessed an excess supply, compelling manufacturers to expand into overseas markets. This strategic move aims to alleviate the pressures arising from domestic competition and achieve swift growth.
Take charge of low-carbon development and strategically plan ahead.
Several lithium-ion battery enterprises are taking the lead in low-carbon development, with numerous players setting their sights on the energy storage battery market, hastening their global strategic positioning. Over the last two years, companies such as CATL, EVE, AESC, Sunwoda, SVOLT, and Farasis Energy have established low-carbon energy factories. They have proactively calculated the carbon footprint of their batteries and created digital passports in advance, all with the goal of accelerating their expansion into overseas markets.
In April of this year, CATL officially unveiled its "Zero Carbon Strategy," declaring its commitment to achieving carbon neutrality in its core operations by 2025 and extending that goal to its entire value chain by 2035. Approval has been granted to four of its production bases, designating them as zero-carbon factories.
EVE has successfully cultivated a green supply chain encompassing waste lithium batteries, chemical materials, battery components, and lithium-ion batteries. This comprehensive supply chain is designed to establish a carbon management system covering the entire lifecycle of batteries.
In April of the current year, Sunwoda initiated a partnership with third-party certification authorities, specifically SGS and TüV Rheinland, to formally launch a project focused on low-carbon supply chain management and carbon footprint assessment for its products.
With a focus on energy conservation, emissions reduction, and efficiency improvement, Farasis actively constructs a green, low-carbon, and recycling manufacturing system. Notably, the company's products for overseas customers received Carbon Neutral Manufacturing certificates from a reputable German organization for two consecutive years, spanning from 2021 to 2022.
Gotion High Tech has achieved a holistic industrial chain, covering materials, batteries, clients, and recycling. This integrated approach allows the company to realize recycling from resource development through energy storage to energy recovery, presenting a viable pathway for the low-carbon development of the battery industry.
The market's trajectory should lean positively, with technology taking the lead.
In the last couple of years, the energy storage sector's prosperity can be attributed to policies supporting the deployment of new energy power stations. These policies create a steadfast demand, fostering early market growth. Moreover, this year has seen a consistent decrease in battery material prices, opening up more avenues for profitability in energy storage.
The undeniable high growth potential of the energy storage sector is accompanied by a surge in competitors vying for market share. The energy storage battery business is experiencing rapid expansion, with power battery companies fiercely competing to establish a foothold in the energy storage arena. Notably, consumer electronics and smaller power battery firms are making efforts to transition into the energy storage realm. Simultaneously, companies from diverse sectors such as photovoltaic, power supply equipment, and power grid ventures are eyeing opportunities to venture into the energy storage field. With a significant increase in new players, the competition in the energy storage sector is escalating, marked by the prominent feature of a price war.
In 2022, the energy storage battery prices soared to 1.3 yuan per Wh, with an average market price hovering around 0.88 yuan per Wh. Numerous industry experts assert that, starting from Q4 of the previous year, many companies adopted a price reduction strategy to secure a larger market share. Consequently, battery prices plummeted, even dipping below $0.7 per Wh. According to relevant data, certain battery manufacturers declared their intention to sell energy storage batteries at $0.5 per Wh, while quoted prices for energy storage systems fell below $1 per Wh. The lowest quoted prices for 1-hour, 2-hour, 3-hour, and 4-hour energy storage systems have all dipped below $0.9 per Wh, with the lowest offer for the 0.5C DC side reaching $0.66 per Wh.
Some industry insiders caution that the market should take a more positive trajectory. Relying on low prices to compete for market share is deemed unsustainable. These insiders advocate for companies to engage in competition through product innovation and differentiation, steering clear of getting ensnared in a price war. The prevailing concern is that a prolonged price war could lead to a continuous decline in product prices, potentially allowing low-quality products to flood the market. In conclusion, energy storage enterprises must prioritize excellent technology to establish core competitiveness and secure ample room for development.
