Energy storage battery falls below the cost line and enters the era of 0.5 yuan/Wh

"Energy storage lithium battery market has officially entered 0." Recently, Dai Deming, chairman of Chuneng New Energy, an energy storage battery manufacturer, announced the news of price reduction at a public meeting, throwing a bomb into the already restless market.

Chuneng announced that by the end of this year, 280Ah lithium energy storage batteries will not exceed 0.

"Chuneng is going to roll up the rhythm of its peers." Xu Yulin, a sales manager of an energy storage battery manufacturer, told 36

Carbon that the blind expansion of domestic battery manufacturers has led to excess supply of energy storage batteries, and the competition in the energy storage battery market is very fierce. New players like Chu Neng can only seize the market by reducing prices.

36 Carbon understands that although Chuneng's 0.5 yuan/Wh is the "forward" price by the end of the year, it is almost the lowest in the mainstream battery factories, which is 6% lower than current market price, which is about 0.

One stone stirs up a thousand waves. Under the catalysis of Chuneng's price reduction plan, the sales manager said that at present, many head battery manufacturers in the market have taken the lead, with 0.5 yuan/Wh (equivalent to tax price 0. And if the purchase volume is large, it can be further discounted. Obviously, Chuneng's price cuts have disturbed the entire energy storage battery market.

"2023 is the first year of the release of new battery capacity." The sales manager said, "At present, there is a serious overcapacity of energy storage batteries in the market, and the price war is already on the way." Lithium

carbonate is the core raw material of batteries, accounting for a large part of the cost of batteries, but when the spot price of lithium carbonate fell to 160000 yuan/ton in April

this year, the transaction price of domestic energy storage batteries was still higher than 0.6 yuan/Wh; But now the spot price of lithium carbonate is still higher than 200,000 yuan/ton, but the transaction price of batteries has fallen below 0.6 yuan/Wh, and the transaction price of second-and third-tier manufacturers has dropped to 0.

The sales manager told 36 Carbon that the BOM (bill of materials) cost of battery manufacturers is rigid. 0. However, the spot price of lithium carbonate in the current market is higher than 200,000 yuan/ton. That is to say, if the manufacturer does not grasp the upstream lithium resources, the cost control ability is not strong enough. Then 0.

this year, Although the installed capacity of energy storage market at home and abroad has achieved rapid growth, the capacity of energy storage batteries has increased even more, resulting in a phased oversupply of energy storage batteries.

"Market demand can not catch up with the speed of production expansion, this year there are new capacity manufacturers, sales pressure is relatively large." The sales manager said. An intuitive manifestation of the

surplus is that the capacity utilization rate of domestic battery enterprises is generally not high . According to GGII data, due to the active expansion of the industry, the current domestic capacity of energy storage batteries has exceeded 200 GWh, and the overall capacity utilization rate has dropped from 87% in 2022 to less than 50% in the first half of this year, of which the capacity utilization rate of household storage batteries is less than 3%.

Energy storage battery manufacturers want to digest the huge production capacity, price reduction has become the most direct and effective way. In April

this year, Li Zhirong, product director of Keshida, said in an interview with 36 Carbon that energy storage battery manufacturers will face greater pressure this year, and in the state of overcapacity, the industry may "knock on the price".

Especially for the cutting-edge manufacturers represented by Chuneng, the acceptance of downstream customers is not high when the brand awareness and technology accumulation are not as good as the traditional leading enterprises. They are facing greater shipping pressure, so it is easy to become the role of "firing the first shot of price reduction".

At present, downstream customers have more and more stringent requirements for the quality of energy storage batteries, and cutting-edge enterprises whose product strength has not been fully verified by the market are at a disadvantage. In April this year, China Huadian, the downstream owner, made it clear in a tender that the bidding energy storage integrators should choose Ningde Times, BYD, Yiwei Lithium Energy or other brands of energy storage batteries at the same level.

But in terms of price, an energy storage integrator executive told 36 Carbon that the price of first-line and third-line battery manufacturers in the market is less than 10%, about 0.

New players eager to occupy the market passively choose to "fire the first shot of price reduction". But this is likely to trigger a chain reaction like Chuneng's price cut, igniting the price war in the energy storage battery market.

Energy storage batteries, more

than power batteries in the past period of time, the energy storage market is an important place for excess capacity of power batteries. With Ningde Times, BYD, Guoxuan Gaoke and Honeycomb Energy as representatives, power battery manufacturers generally lay out energy storage batteries as the second growth curve.

Energy storage business once brought considerable returns to battery companies. The energy storage business revenue of Ningde Times was only 1.943 billion yuan in 2020, and had increased to 449 yuan by 2022. In October last year, another head energy storage battery manufacturer, Yiwei Lithium Energy, said in a conference call that its energy storage orders in hand far exceeded the company's sales capacity, facing the problem of resource allocation or capacity allocation.

But now the energy storage battery market has rapidly switched from capacity shortage to overcapacity, and the competition is more inward than power batteries.

Over the past two years, the energy storage battery track has been flooded with players from all sides, coveting the dividends of the trillion-dollar energy storage market, and some companies that have never had experience in battery manufacturing have frequently crossed the border.

GGII simply divides the players in the energy storage battery market into four categories, one is that the above-mentioned power battery companies enter the "energy storage battery track". The two are similar in the manufacturing process; The second category is

The fourth category is some "veterans" in the field of energy storage batteries, who entered the field of energy storage earlier and gradually upgraded energy storage batteries to the main business, such as Nandu Power Supply, Penghui Energy, Haiji New Energy, etc.

Xu Yulin said that energy storage batteries use lithium iron phosphate route, which has a lower technical threshold than power batteries. As a result, some inexperienced new players can cut into this track more easily. A prominent manifestation of the low

threshold is that many domestic energy storage system integrators are extending the layout of energy storage batteries upstream, including Tianhe Energy Storage, Jingke Energy Storage, Pineng Technology, and even energy storage start-ups such as Zhonghong Kechuang have begun to produce their own batteries. But in the field of new energy vehicles, although the car companies are more wealthy, they seldom get involved in the upstream battery production. New players are pouring in from

all directions, and the production capacity of the old players is still expanding. Under the background of overcapacity, the risk of market shuffling is also brewing. In July

this year, GGII warned in its report that the concentration of the energy storage battery market is expanding, and that third and fourth-tier and new entrants may be marginalized. Wang Pengcheng, co-founder of Haichen Energy Storage, has repeatedly emphasized a point of view this year: the next three years will be a "life-and-death card race" for the energy storage industry.

However, as an emerging track with potential trillion-level market space, the energy storage market is still growing rapidly and has huge growth potential-in the first half of this year, the new installed capacity of domestic new energy storage (mainly electrochemical energy storage represented by lithium batteries) is close to the total installed capacity in the past 10 years. The

rapidly expanding energy storage market may be able to absorb the surge in battery capacity, or at least provide a "safety cushion" for battery companies. This stage surplus is essentially different from the overcapacity of traditional industries and sunset industries.

At present, there are still many new players who are speeding up the layout of the energy storage battery market. They are more confident about the energy storage market than they are worried about overcapacity. They are still busy expanding production capacity and recruiting employees, and even spend a lot of money to "poach" talents from competing enterprises.

"The energy storage market is in the investment period, and now is not the time to pursue profits." A senior executive of an energy storage company told 36 Carbon that the second half of new energy is energy storage, and profits are natural after the industry structure stabilizes in the future. "The most urgent task is to occupy a place in the market as soon as possible.".