(Yicai) Jan. 26 -- Electric car battery prices have slumped amid overcapacity, and sustained large-scale investments will likely further add to the glut, according to industry experts.
Auto battery sales reached 616.3 gigawatt-hours in China last year, but only 387.7 GWh was installed, with inventories of 101.2 GWh, data from China Automotive Battery Innovation Alliance showed on Jan. 11.
Power battery giant Contemporary Amperex Technology saw its capacity usage rate plunge to a record low of 61 percent in the first half of last year. That of peer EVE Energy fell to 79 percent, compared with 93 percent a year earlier.
The price of square lithium iron phosphate batteries was on average 38 Chinese cents (5 US cents) per watt-hour on Jan. 24, down 60 percent from early last year, according to data from Iccino.com.
This is a form of structural overcapacity, a professional noted. There is excess capacity for low-end products, while those of high quality remain in short supply, he said, adding that capital is still pouring into the battery sector and producers are continuously expanding their capacity.
There were as many as 403 capacity expansion projects in the electric vehicle battery supply chain last year, according to statistics from Itdcw.com. The investment in 328 of them, which disclosed figures, was CNY1.4 trillion (USD197.6 billion).
The planned annual output capacity of industry leaders CATL, BYD, Svolt Energy Technology, and CALB Group will reach 4,200 GWh by next year, which is enough to install 50 kilowatt-hour packs in 48 million new energy vehicles. China will only need 1,000 GWh, said Zhu Huarong, chairman of carmaker Changan Automobile.
The battery industry should be alert to the waste of resources caused by structural overcapacity, the chairperson of a major power battery maker told Yicai. Older equipment and technology will soon be phased out by high-quality production capacity, potentially resulting to losses of CNY100 billion (USD14.1 billion), the person noted.
In the face of this glut, CALB, CATL, and BYD have raised their investments in energy storage batteries. Global energy storage battery shipments jumped 60 percent to 173 GWh last year, growing faster than the usage rate for power batteries, which climbed 32 percent.
With a complete supply chain, China's battery industry has a global cost advantage and its products are very competitive overseas, an analyst pointed out.
Major battery producers are bound to expand abroad this and next year, whether it is in Southeast Asia, Europe, or the American continents, said Zhang Xiaofei, chairman of Shenzhen Gaogong Industrial Research.
Editors: Zhang Yushuo, Martin Kadiev