1. Power Battery Shipments Grew by 20%, Energy Storage Batteries by 70%

According to preliminary research from Gaogong Industry Research Institute (GGII), China's lithium battery shipments reached 786 GWh in Q1-Q3 2024, marking a 30% year-on-year increase. Of this total, power and energy storage battery shipments were 533 GWh and 216 GWh, with year-on-year growth rates of 20% and 70%, respectively.

In the power battery sector, lithium iron phosphate (LFP) batteries accounted for 378 GWh, or 71% of total shipments. This dominance is driven by:

1) Intense price competition among car manufacturers in 2024, with LFP batteries offering a high cost-performance ratio;

2) Slowing sales growth of overseas electric vehicles (EVs), primarily using ternary batteries, with some models transitioning to LFP. From January to September 2024, China’s new energy vehicle (NEV) sales reached 8.32 million units, a 32.5% increase year-on-year, with a market penetration rate of over 45% in September alone. Among these, plug-in hybrid electric vehicles (PHEVs) represented 40%, reaching 3.328 million units. NEV sales of B-segment and higher accounted for over 50% of the market share. Additionally, China’s new PV installations reached 139.99 GW from January to August 2024, a 23.7% increase year-on-year, driving demand for energy storage systems.

3) Anticipated tariffs on Chinese lithium batteries exported to the U.S., prompting intermediaries to stockpile energy storage batteries. In the consumer electronics market, new technologies (AI), product upgrades, and new releases (e.g., Huawei’s foldable phones) continue to drive demand.

2. Key Material Growth Exceeds 20%, with LFP Leading the Cathode Material Sector

GGII data indicates that total domestic shipments of cathode materials in Q1-Q3 2024 reached 2.26 million tons, a 26% year-on-year increase. LFP materials accounted for 1.62 million tons, representing a 37% increase and 71.4% of total cathode shipments, leading growth in the sector. Ternary cathode shipments reached 480,000 tons, with a slight 1.6% decline. Shipments of lithium cobalt oxide and lithium manganese oxide reached 74,000 tons and 94,000 tons, with year-on-year growth of 23% and 31%, respectively.

The rising share of LFP is largely due to increased demand from energy storage and LFP power batteries. The decline in ternary cathode materials is attributed to slower-than-expected market growth and export challenges. The growth in lithium cobalt oxide and lithium manganese oxide is primarily driven by demand from the 3C digital market.

During Q1-Q3 2024, separator material shipments reached 15.4 billion square meters, up 27% year-on-year. Wet-process separators accounted for 12 billion square meters, a 37% increase, with market share rising by 5.6 percentage points to 78%, largely due to significant shifts in the energy storage sector.

Anode material shipments in China reached 1.49 million tons, marking a 24% year-on-year growth. Within this category, artificial and natural graphite shipments were 1.28 million tons and 205,000 tons, respectively.

In September, artificial graphite shipments grew by 4% month-on-month, with slower growth mainly due to industry-wide inventory clearances and reduced upstream material procurement.

Electrolyte shipments in China reached 1.02 million tons in Q1-Q3 2024, a 28% increase year-on-year.