Liu Jincheng, the chairman of leading Chinese battery firm EVE Energy, said at an event on November 16 that the company will achieve a delivery capacity of more than 100GWh by the end of this year. Large cylinder batteries and large lithium iron batteries will represent its top products throughout the next three years, significantly reducing cost-per-Wh. Liu also predicted that there will be overcapacity across the whole battery chain in 2024 at the latest, and only battery products with high quality and low cost will be spared.
The current planned capacity of EVE Energy is nearly 300GWh, and it is still expanding production. Compared with other battery firms, this goal is not radical. The production capacity of CATL, for example, is intended to reach 670GWh in 2025, while BYD and SVOLT aim to reach 600GWh in the same year. The production capacity target of CALB by 2025 is 500GWh. According to incomplete statistics released by Chinese research institute Starting Point, in the first quarter of this year alone, BYD, Sunwoda, CALB, EVE Energy, and other battery companies have successively announced a number of new investment projects, with overall investment capital of 228.77 billion yuan ($32.3 billion) and an annual production capacity of 620GWh.
The enthusiasm of battery enterprises for expanding production is due to the expanding new energy automobile industry and an ongoing shortage of batteries. Since the beginning of this year, many NEV companies have stated that battery supply is tight, which also leads to continuous delays to delivery. Liu Jincheng said at the end of March this year that battery supply was still tight, and the production lines of various factories of EVE Energy were at full operational capacity.
However, China’s battery industry has always had the structural contradiction of insufficient high-end capacity and excessive low-end capacity.
Ouyang Minggao, an academician at the Chinese Academy of Sciences, believes that battery production capacity is expanding rapidly. Based on industrial investment information, domestic battery production capacity may reach 1500GWh in 2023 and 3000GWh in 2025, while battery shipments are expected to reach 1200GWh in 2025, of which 70% to 80% will be used in the Chinese market and 20% to 30% will be exported to overseas markets. It is estimated that there will be battery overcapacity by 2025.