According to industry analysis on September 19, August showed strong momentum for power batteries, with excellent performance in both exports and domestic sales. Currently, the main battery energy density range for pure electric vehicles is between 125 to 160, with recent slight improvements in high-energy-density batteries.

In August, China's combined output of power and other batteries reached 139.6GWh, up 4.4% month-on-month and 45% year-on-year. For the January-August period, cumulative output of power and other batteries totaled 970.7GWh, representing a 43% year-on-year increase.

The competitive landscape among battery companies features CATL (03750) and BYD COMPANY (01211) as relatively stronger players. CATL's market share in lithium iron phosphate batteries has surpassed BYD since 2024, while plug-in hybrid growth remains sluggish. Industry competition is evolving rapidly, with EVE Energy (300014.SZ) and CALB (03931) showing strong performance. Sunwoda (300207.SZ), REPT BATTERO (00666), SVOLT Energy, and Great Power New Energy have shown significant improvement.

Due to BYD's comprehensive transition to lithium iron phosphate batteries, the advantages of the top three ternary battery manufacturers - CATL, LG, and SVOLT - have become more pronounced, with GAC Aion and EVE Energy performing well recently.

Currently, the proportion of power battery production that goes into vehicle installation is continuously declining. In 2021, the installation rate of power batteries reached 70%; in 2022 it was 54%; in 2023 it was 50%; in 2024 the installation rate rose to 50%, with ternary batteries at 50% and lithium iron phosphate at 50%. For 2025, the installation rate dropped to 43%, with ternary batteries at 38% and lithium iron phosphate at 45%.

With the development of energy storage and other industries, particularly driven by the global energy crisis from the Russia-Ukraine conflict, battery demand for energy storage has grown rapidly, leading to a significant decline in the proportion of batteries used for vehicle installation. However, the market pullback at the beginning of the year also contributed to this decline. Both power batteries and energy storage batteries face production overcapacity and relatively high inventory pressure.

In 2021 and 2022, power battery growth lagged behind vehicle growth. In 2023 and 2024, power battery installation was relatively low, with battery production matching installation growth. In 2025, battery production increased significantly while installation started low, with August installation rates maintaining recent highs.

Power battery installation demand growth has been extremely strong. Growth was 10% in 2019; 2% in 2020 with domestic vehicle power battery installation at 64GWh; 143% in 2021 with 155GWh installation; 91% in 2022 with 295GWh; 32% in 2023 with 388GWh; 41% in 2024 with 548GWh lithium battery installation; and 43% in 2025 with 418GWh lithium battery installation.

Passenger vehicle battery demand continues strong growth. In 2025, pure electric passenger vehicle battery demand grew 36.4%, while plug-in hybrid passenger vehicle battery demand grew 16.9%, maintaining robust growth. Pure electric commercial vehicle battery demand also surged significantly, reaching 155.2%.

August 2025 battery installation growth reached 32.4%, with commercial vehicles showing particularly strong growth. Pure electric commercial vehicles surged 164% in August, while plug-in hybrid commercial vehicles grew 106%.

From the battery installation proportion perspective, power battery demand structure has been rapidly changing in recent years. In 2020, the hierarchy was pure electric passenger vehicles first, pure electric buses second, and pure electric specialized vehicles third, with plug-in hybrid passenger vehicles in fourth place. By 2025, pure electric passenger vehicles maintained first position, plug-in hybrid passenger vehicles rose to second, pure electric commercial vehicles rose to third, plug-in hybrid specialized vehicles rose to fourth, and pure electric buses dropped to fifth.

In recent years, the pure electric bus market has declined dramatically, while pure electric specialized vehicles maintained rapid battery usage growth. Pure electric buses dropped from 18.5% in 2020 to 1% cumulatively in 2025, a decline of 17.5 percentage points. Plug-in hybrid passenger vehicle battery usage has grown rapidly, rising from 6.8% in 2021 to 18.0% in 2025, an increase of 11.2%, while pure electric passenger vehicles dropped to 63.5%. Plug-in hybrids and pure electric vehicles maintain approximately 80% of the core battery demand characteristic for passenger vehicles.

Based on certificate battery volume calculations, the domestic new energy vehicle market installed 11.68 million units in 2024, up 42% year-on-year, including 6.35 million pure electric passenger vehicles (up 21%), 4.71 million plug-in hybrid passenger vehicles (up 85%), and 540,000 pure electric specialized vehicles (up 45%).

August 2025 new energy vehicle certificate production reached 1.19 million units, up 17% year-on-year. January-August 2025 domestic new energy vehicle certificates totaled 8.16 million units, up 31%, including 4.94 million pure electric passenger vehicles (up 45%), 2.79 million plug-in hybrid passenger vehicles (up 12%), and 390,000 pure electric specialized and commercial vehicles.

Over the past few years, the competitive landscape of the battery market has not changed significantly. August 2025 saw 33 supporting battery companies at a low level. Due to relatively slow technological progress in the power battery market and obvious scale growth characteristics, battery companies have achieved strong production and installation volume growth. The existing battery landscape shows no obvious changes - whoever invests more can gain larger market share, forming the characteristic of sustained strong expansion by major battery companies. Small and medium-sized battery companies also have opportunities to achieve certain growth through technological or other breakthroughs. Therefore, the battery landscape should be considered relatively stable overall during high-speed growth.

However, future opportunities for change in the battery industry are relatively large. The trend of vehicle manufacturers producing batteries or collaborating with related companies to jointly produce batteries is becoming increasingly obvious. Battery companies will gradually form core supporting products for vehicle manufacturers.

As battery prices fall, electric vehicle range continues to increase. Currently, the demand for premium electric vehicle markets is very strong, similar to upgrading "elderly mobility vehicles" to micro cars, with significant policy pressure leading to obvious premiumization. In the second half of 2024, with policies such as trade-in programs, the small car market warmed up, micro electric vehicles boomed, driving down installed battery levels. As electric vehicles show cost advantages, the structure of pure electric specialized vehicles is developing toward heavy trucks, driving dramatic increases in battery capacity.

From a supply chain perspective, vehicle manufacturers will become increasingly powerful in the future, with strengthened control over battery companies and upstream supply chains, while also enhancing control over downstream brand marketing capabilities. Under the new energy system, the "vehicle manufacturer dominance" characteristic will continue to be prominently displayed.

Currently, the main battery energy density range for pure electric vehicles is between 125 to 160. Particularly notable in Q3 2025 is that batteries with 140 to 160 energy density accounted for 37%, up 3 percentage points year-on-year. Q3 2025 vehicles with battery energy density above 160 accounted for 7%, down from 11% in 2024, mainly due to lithium iron phosphate batteries replacing ternary batteries, causing energy density decline. Products with energy density below 125 dropped to 1% proportion in 2025.

The competitive landscape among battery companies features CATL and BYD as relatively stronger players. CATL's Q3 2025 share dropped to 42%, while BYD's share rose from 15% in 2020 to 26.9% in 2023, then declined to 21.4% in Q3 this year. Other battery companies also showed obvious differentiation trends. Battery companies formed a characteristic of slowing concentration effects among leading companies, maintaining 67% share for the top two companies in 2025, compared to 72% in 2022, leaving over 30% space for other companies.

Lithium iron phosphate battery products show obvious differentiation advantages. BYD is relatively excellent but was in an adjustment period at the beginning of this year. CATL's lithium iron phosphate battery market share has surpassed BYD since 2024. BYD continued declining in 2025, with share down 10.1 percentage points year-on-year. EVE Energy and CALB showed strong performance. Sunwoda, REPT BATTERO, SVOLT Energy, and Great Power New Energy showed significant improvement.

Due to BYD's comprehensive transition to lithium iron phosphate batteries, the advantages of the top four ternary battery manufacturers - CATL, LG, and SVOLT - became more pronounced, with GAC Aion and EVE Energy performing well recently. LG Energy Solution improved statistically due to increased domestic sales proportion of Tesla (TSLA.US).