GGII data shows that China's lithium battery shipments in 2020 will be 143GWh, a year-on-year increase of 22%. It is expected that China's lithium battery market shipments will reach 615GWh in 2025, and the compound annual growth rate from 2021 to 2025 will exceed 25%.

In 2020, although the development of the lithium battery industry faces a series of unfavorable external conditions, such as the continuation of the new crown epidemic, the macroeconomic downturn, and the intensification of global trade barriers, my country's lithium battery industry has achieved rapid development. In particular, the outbreak of the downstream application market has effectively driven the growth of the lithium battery market.

According to the "2021 China Lithium Battery Industry Research and Analysis Report" released by the Lithium Battery Research Institute of the High-tech Industrial Research Institute, the Chinese lithium battery market in 2020 has been comprehensively sorted.

According to the Lithium Battery Research Institute (GGII) statistics, China's lithium battery shipments in 2020 will be 143GWh, a year-on-year increase of 22%. The growth rate is more than 25%.

Shipment volume and forecast of China's lithium battery market from 2016 to 2025 (unit: GWh, %)

From the perspective of specific application fields, new energy vehicles, 3C digital fields, energy storage, small power, and power tools are the main downstream application markets for lithium batteries.

1. The proportion of lithium battery demand for new energy vehicles continues to increase, and the balance will reach 56% in 2020

The proportion of power battery shipments for new energy vehicles continued to increase. In 2020, China's vehicle power battery shipments will be 80GWh, a year-on-year increase of 12.7%, accounting for 56% of China's lithium battery market, far exceeding other application terminals. In terms of product shape, the proportion of prismatic battery shipments has increased from 57.5% in 2017 to 80.8% in 2020. The direct reason is that the domestic power battery market concentration has increased in the past three years, and the proportion of TOP3 has increased from 2017. 51.2% in 2020 increased to 83.1% in 2020, while TOP3 (CATL, BYD, Guoxuan) are all dominated by square power batteries, which drives the proportion of square batteries to a certain extent.

Cylindrical batteries accounted for 9.7%, an increase of 2.4 percentage points over the previous year. The proportion of cylindrical power battery shipments increased, mainly due to the substantial increase in domestic Tesla model 3 and other models, which led to the rise in domestic power battery shipments of LG and Panasonic. It is expected that in the next few years, driven by the significant cylinder effect of Tesla 4680, the proportion of cylinders in the field of power batteries is expected to continue to increase.

Market share and forecast of China's power battery from 2017 to 2025 (unit: %) (by shape)

 Note: The proportion of cylindrical batteries covers the shipments of LG and Panasonic power batteries;

2. The shipment of lithium batteries for two-wheeled vehicles has increased by 78%, driven by the demand of the overseas two-wheeled vehicle market.

In 2020, lithium-ion two-wheelers' shipment of lithium batteries (including shared motorcycles and shared power exchange cabinets) was 9.7GWh, a year-on-year increase of 78%, mainly due to the substantial increase in the market demand for lithium-ion light vehicles. The main reasons for the significant growth of the lithium battery light vehicle market are: 1) The epidemic has led to changes in travel modes, and consumers' demand for electric light vehicles has increased especially electric two-wheelers; 2) China's 3C standards are implemented, and new lithium batteries for two-wheelers are produced. The proportion of applications has increased, and the replacement of lead-acid batteries has accelerated; 3) Due to the impact of the epidemic and the high subsidies for electric two-wheelers in European countries, the demand in foreign markets will double in 2020, driving domestic two-wheelers and upstream lithium batteries. Shipment increased; 4) In addition, in 2020, the domestic market share of shared motorcycles will increase by 310% year on year. The amount of power exchange cabinets for shared motorcycles will increase by 150% year on year, driving upstream lithium batteries.

In the next few years, with the increase in the scale of the domestic sharing market, the gradual improvement of industry standardization and standardization, and the acceleration of the replacement of lead-acid by lithium batteries, GGII predicts that by 2025, the shipment of lithium batteries for light vehicles in China will reach 35GWh.

3. The industrial chain of mainstream power tool manufacturers such as TTI has shifted to China, driving the shipment of power tool lithium batteries to increase by 124% year-on-year

In 2020, the domestic shipment of lithium batteries for power tools was 5.6GWh, a year-on-year increase of 124%. The main reasons for the substantial growth of the lithium battery market for power tools are:

The international power tool terminal enterprises led by TTI have gradually shifted the industrial chain to China, promoting the domestic power tool lithium battery industry to speed up the industry transformation and layout.

The epidemic has led to the family. The increase in demand for DIY tools and cordless power tools drives the need for upstream lithium batteries.

Power tools are gradually switched from wired to wireless. Wireless power tools have relatively high power requirements, which increases the number of batteries used by a single power tool and drives the production of lithium batteries.

4) Foreign lithium battery companies represented by LG, SDI, and Panasonic will gradually shrink their production lines to produce power batteries in 2020, reducing the supply of cylindrical batteries for power tools. Domestic cylindrical battery companies quickly occupied the space.

GGII predicts that as domestic cylindrical lithium battery companies accelerate the replacement of LG, SDI, and Panasonic, my country's lithium battery market for power tools will maintain a compound annual growth rate of 19% in the next five years.

4. Driven by overseas market demand, the export of energy storage lithium batteries increased, driving the shipment of energy storage lithium batteries to increase by 71%

According to statistics from the Lithium Battery Research Institute (GGII) of the High-tech Industrial Research Institute, China's energy storage battery market shipments in 2020 will be 16.2GWh, a year-on-year increase of 71%. Compared with 2019, the rapid growth of the power and communication energy storage market is the main reason for domestic energy storage lithium battery shipments.

The main reasons for the significant year-on-year increase in power storage in 2020 are 1) The power generation focuses on supporting new energy power generation to solve the problem of consumption (the central hot spot in 2020), and participates in auxiliary services such as power grid frequency regulation jointly with thermal power units, and obtains corresponding frequency regulation compensation Revenue; 2) There is an increase in the market for frequency regulation and peak regulation on the grid side, and there is an inevitable increase in the frequency regulation market represented by lithium manganate batteries; 3) The distributed energy storage field focuses on supporting photovoltaic, decentralized wind power and other areas, forming a distributed wind and solar energy storage system.

GGII predicts that the energy storage market will continue to accelerate in the next few years, with energy storage battery shipments reaching 58GWh by 2025, with a compound annual growth rate of more than 30% in the next four years.

5. The downstream market is becoming more and more mature, and the growth of the 3C digital market is flattening

In 2020, the overall domestic demand for 3C digital terminals will increase steadily. The main growth points will come from the continued increase in the proportion of domestic digital lithium batteries in domestic airports and new products such as electronic cigarettes. According to data from the Lithium Battery Research Institute (GGII) of the High-tech Industrial Research Institute, China's 3C digital battery shipments will grow by 8.8% in 2020, with a total load of 36.6GWh. In 2020, compared with 2019, the devices that have significantly increased shipments in the 3C digital terminal field include IoT terminal equipment (POS machines, intelligent robots), tablet computers, notebook computers, 5G smartphones, TWS headset batteries, ETC batteries, Electronic cigarette batteries and batteries for small household appliances, etc. Among them, 5G smartphones are driven by the wave of replacement, notebooks and tablets are driven by online working modes, and the fields of electronic cigarettes and TWS headset batteries have increased significantly.

In addition, the rise of products such as smartphone terminal demand, civilian drones, and intelligent wearable devices brought about by the promotion of 5G technology will also drive the growth of consumer batteries. GGII predicts that the growth rate of demand for 3C digital lithium batteries will remain at 5% to 10% in the next few years.

On the whole, several major downstream application fields of lithium batteries are still increasing, such as the new energy vehicle market, energy storage market, etc. They will maintain a compound annual growth rate of more than 30% in the next few years. Driven by the strong demand in the downstream market, the lithium battery market shipments will maintain rapid growth momentum in the next few years.