Cui Dongshu reported on October 21 that the performance of power batteries in September was robust, with strong results in both exports and domestic sales. The energy density of the primary batteries for pure electric vehicles currently ranges between 125 and 160, with slight improvements in high energy density recently. In September, China’s total production of power and other batteries reached 151 GWh, marking a 50% year-on-year increase. From January to September, the total battery production amounted to 1122 GWh, reflecting a 44% year-on-year growth. In 2025, the proportion of power batteries installed in vehicles is forecasted to remain at 44%, with ternary batteries at 39% and lithium iron phosphate batteries at 46%. The installation rate of power batteries in September 2025 rose to 50%, with ternary batteries at 44% and lithium iron phosphate batteries at 52%, achieving a peak installation enthusiasm within the year.

The newly qualified production of electric vehicles in September 2025 stood at 1.43 million units, up 22% year-on-year. From January to September 2025, there were 9.59 million new energy vehicles with domestic qualifications, representing a significant 29% year-on-year increase, including 5.8 million pure electric passenger cars (up 44% year-on-year) and 3.28 million plug-in hybrid passenger cars (up 10% year-on-year). The output data shows strong performance. In the third quarter of 2025, vehicles with battery energy density above 160 accounted for 7%, a notable decrease from 11% in 2024, primarily due to the energy density decline caused by the replacement of ternary batteries with lithium iron phosphate batteries. Meanwhile, products with energy density below 125 dropped to 1% in 2025.

The competitive landscape among battery companies has prominently featured a strong presence of CATL and BYD Company Limited. CATL's share of lithium iron phosphate batteries has overtaken that of BYD since 2024, with weaker performance in plug-in hybrids. The industry's competition is changing rapidly. Companies like EVE Energy (300014.SZ) and CALB (03931) are performing strongly, alongside significant improvements from Xinwangda (300207.SZ), REPT BATTERO (00666), Hive Energy, and Jidien New Energy. Due to BYD's complete transition to lithium iron phosphate batteries, CATL, CALB, and Hive Energy now have a more pronounced advantage in ternary batteries. Recently, companies like Juwa Technologies and EVE Energy have also shown good performance.

1. Installation rate of power batteries: In September, China's total production of power and other batteries was 151 GWh, a 50% year-on-year increase. From January to September, the cumulative total was 1122 GWh, a 44% year-on-year growth. The installation proportion of power batteries has been steadily declining, reaching 70% in 2021; 54% in 2022; 50% in 2023; expected to rise back to 50% in 2024, equally between ternary and lithium iron phosphate batteries. The proportion of installed power battery production is maintained at 44% in 2025.

2. Declining share of ternary batteries in domestic vehicles: The demand for installed power batteries is experiencing strong growth. Demand increased by 10% in 2019; with a slight rise to two percent in 2020 when 64 GWh of power batteries were installed for domestic vehicles; up to 155 GWh in 2021 with a 143% growth; 295 GWh in 2022 with a 91% increase; and reaching 388 GWh in 2023 with a 32% rise; further expected to rise to 548 GWh in 2024 (a 41% increase) and 494 GWh in 2025 with a 42% rise.

3. Continuous robust growth in automotive battery demand: The demand for passenger vehicle batteries remains strong, with a 35.5% increase for pure electric vehicles in 2025, while plug-in hybrids have a sustained increase of 16.1%. Demand for batteries in pure electric trucks has also surged by 156.5%. The growth in battery installation reached 39.5% in September, especially notable in commercial vehicles, with a remarkable 164% increase in pure electric trucks and a 32% rise in plug-in hybrid trucks. The demand structure for power batteries is rapidly changing.

4. Qualified vehicle production: In 2024, it’s projected that 11.68 million new energy vehicles will be installed in the domestic market, showing a strong year-on-year growth of 42%, with pure electric passenger cars at 6.35 million (21% increase), plug-in hybrids at 4.71 million (85% growth), and specialized pure electric vehicles at 540 thousand (45% increase). In September 2025, the qualified production of new energy vehicles was confirmed at 1.43 million units, up 22% year-on-year.

5. Battery suppliers' competition remains underdeveloped: Over recent years, the competition landscape in the battery market has remained relatively unchanged. By September 2025, the number of supporting battery companies reached 35, establishing a normal baseline of competition. Advances in technology have been slow within the power battery market, leading to a notable increase in production and installation figures. The existing structure has not changed significantly, driven largely by who invests more consequently gaining market share. Thus, larger battery companies exhibit strong expansion, while smaller firms seek growth through technological breakthroughs.

6. Varying capacities of batteries across vehicle types: As battery prices have decreased, the range of electric vehicles has continued to improve. There is very strong demand for high-end electric vehicles. Meanwhile, policies pushing for older vehicle upgrades have rejuvenated the small car market, leading to a boom in micro electric vehicles, which in turn reduced installed battery capacities. Notably, the cost advantage of electric vehicles is transitioning specialized electric vehicles toward heavy-duty trucks. Future supply chain issues will lead to increased control by vehicle manufacturers over battery producers and upstream supply chains.

7. High energy density batteries will decrease: The principal energy density range for power batteries in pure electric vehicles is currently between 125 and 160. Particularly in Q3 2025, the share of batteries in the range of 140 to 160 reached 37%, up three percentage points year-on-year. However, the share of vehicles with energy density over 160 fell to 7% from 11% in 2024, significantly impacted by the energy density drop caused by lithium iron phosphate replacing ternary solutions.

8. Competitive landscape among battery companies: The competitive landscape in battery companies displays a relative strength focused on CATL and BYD. CATL's share decreased to 42% in Q3 2025, while BYD's share rose from 15% in 2020 to 26.9% in 2023, and subsequently fell to 21.4% in Q3 of this year. Other battery companies exhibit a marked divergence in shares. The concentration of market share among leading firms has stabilized; the top two companies maintained a 72% share since 2022, leaving roughly 30% for smaller entities. The advantages of lithium iron phosphate products are distinct, even though BYD performed relatively better; however, it remains in an adjustment period this year. CATL's share of lithium iron phosphate batteries surpassed that of BYD in 2024. BYD's continuous decline resulted in a drop of 10.1 percentage points relative to the same period. Lastly, EVE Energy and CALB have shown strong performance, while other companies also exhibit notable improvements.