Energy storage performance of lithium battery manufacturers soared in 2022 H1

Under the continuous catalysis of policies and markets, China’s energy storage market is rapidly expanding. According to data, in the first half of 2022, China’s energy storage lithium battery production reached 32GWh, an increase of 113.3% year-on-year. At the same time, the tight supply and demand of energy in Europe has also opened up a huge increment for the global market of household light storage.

Thanks to strong market demand, battery companies accelerated the pace of project implementation and capacity expansion in the first half of the year. Reflected in the performance, the H1 energy storage performance of lithium battery listed enterprises, mainly CATL, Pylontech, Gotion High Tech, Sunwoda and so on, ushered in a surge.

Energy storage business will become the second performance driver

In addition to the competition in the power battery market, the energy storage market is becoming a new direction. In the first half of this year, the energy storage performance of the leading lithium battery enterprises in the first half of this year increased significantly compared with the same period last year, and their proportion also increased synchronously.

For example, CATL’s energy storage system business continued to maintain high-speed growth in the first half of 2022, with a revenue of 12.74 billion yuan, a year-on-year increase of 171.5%, and a record high revenue share of 11.27%, bringing huge profits to CATL.

In the first quarter of 2022, the energy storage battery business income of Great Power has more than tripled, accounting for more than 40% of the total income. It is expected that the energy storage business will achieve a sustained high growth in the first half of the year.

Gotion High Tech disclosed the performance of energy storage batteries for the first time, achieving a revenue of 1.279 billion yuan in the first half of the year, accounting for 14.8%.

Behind the increase in performance is the rapid advancement of energy storage business layout, including capacity planning, product research and development, customer development, and so on.

According to statistics, more than 70 enterprises were established in the field of energy storage in China in the first half of the year, including many well-known enterprises investing in energy storage across the border.

Since May this year alone, about 20 listed companies have announced investment plans for energy storage projects. There are many great manufacturers do well in the field of energy storage, which can be seen in top 20 energy storage system companies in China in 2022.

On the one hand, power batteries such as CATL, BYD, CALB, Gotion High Tech, EVE, Sunwoda, etc. have frequently landed in power and energy storage production bases, taking into account the two major directions of power and energy storage.

On the other hand, enterprises focusing on energy storage batteries, such as Hithium, have increased investment to promote project expansion.

In terms of market development, in the first half of the year, Gotion High Tech focused on four major energy storage fields, namely, power generation side, power grid side, user side and standby power side, with three product platforms of domestic energy storage, commercial energy storage and grid level energy storage, and continued to vigorously develop the global energy storage market.

EVE has carried out business cooperation with China’s major telecom operators, leading enterprises of communication facilities, and multiple power grid companies in the fields of communication energy storage or power grid side support, and accumulated a number of global famous brand customers in the fields of household energy storage and industrial and commercial energy storage.

Sunwoda recently said that the company will undertake energy storage system solutions according to projects, such as the energy storage projects it cooperates with China Southern Power Grid. At present, it is increasing the promotion of household energy storage and other businesses.

At the product R & D end, CATL has a variety of technical reserves in the energy storage business segment, of which sodium ion batteries are expected to be applied first;

At present, Gotion High Tech has realized the industrial application of full life cycle anode lithium ion compensation technology in the field of energy storage, extending the life of lithium ion batteries to 12000 cycles, far exceeding the market average.

The follow-up layout of battery manufacturers will undoubtedly rapidly expand the scale of the energy storage market. At present, energy storage is from 0 to 1. In the next 3 to 5 years, the explosion rate of energy storage is expected to exceed that of new energy vehicles. During this period, energy storage will also become an important growth pole for battery manufacturers.

The gross profit of energy storage is under short-term pressure

What needs to be mentioned is that while the energy storage business of major battery enterprises is rising rapidly, the gross profit level has declined significantly due to the rising price of raw materials.

In the first half of this year, the gross profit margin of CATL’s energy storage system fell the most among the three major sectors. Sunwoda also said that the gross profit margin of energy storage batteries fell more year-on-year than that of consumer batteries.

The decline in gross profit margin caused by the sharp rise in raw material prices has become a common problem in the lithium battery industry. Pylontech also said that in the short term, the tension between supply and demand of some raw materials will persist.

At the same time, because the price negotiation time and cycle of energy storage projects are longer than those of downstream vehicle companies of power batteries, the energy storage price transmission mechanism is slower and more sensitive to cost changes.

In addition, China’s energy storage has witnessed explosive growth at present. In order to quickly seize the market and maintain the market share, manufacturers have sacrificed their gross profit margin to a certain extent. The crazy investment and production expansion of enterprises have also diluted the growth of performance, and the profitability of energy storage has not yet emerged.

At present, it can be seen that in order to repair the profitability of lithium battery business, battery companies have set about supply chain layout one after another, from the upstream nickel cobalt lithium mine to the terminal battery recovery, to hedge against material price fluctuations.

As downstream demand remains strong, prices are gradually transmitted, and production capacity is accelerated, the gross profit margin of each energy storage business is expected to be repaired in the future.

Global energy storage market is extremely hot

In the global energy storage market in the first half of the year, household energy storage market is the focus of each enterprise’s layout and also one of the main sources of energy storage performance growth.

For example, Pylontech achieved a revenue of 1.854 billion yuan in the first half of the year, an increase of 171.94% year-on-year; The net profit was 264 million yuan, an increase of 70.02% year-on-year.

From the perspective of single quarter, Pylontech’s revenue was 1.039 billion RMB, a month on month increase of 27.66%; The net profit was 162 million yuan, an increase of 60.20% month on month, both of which reached a new high.

This is mainly due to its order demand in the global consumer energy storage market, especially in Europe. It is understood that household energy storage has shown explosive growth in the European and American markets at an annual growth rate of double since 2021.

Pylontech’s market share of household energy storage products in Italy, Spain, the United Kingdom, Austria, the Czech Republic and other countries in the first half of the year has steadily taken the lead in the market, and the global market share of household energy storage products has further increased.

Besides Pylontech, battery companies such as BYD, Great Power and Fast East Battery are also accelerating their efforts to seize the vast market of household storageAt present, Great Power has obtained a large number of global orders in the field of household energy storage, with a shipment of more than 100000 sets;

Since Fast East Battery opened the international energy storage market in September last year, it has also received more than 10 million orders for global household energy storage system batteries, totaling 371 million RMB.

At present, the first batch of European household energy storage products of Fast East Battery have been officially delivered.

NARADA also said that small model products for household storage will be expanded in a small scale this year, with an expected revenue of 150-200 million. Next year, the number of orders received will continue to rise, and the revenue is expected to reach 2 billion, or even 2.5-3 billion.

At present, under the development trend of carbon neutrality, the household energy storage market will become the fourth important direction of the new energy industry after wind power, photovoltaic and electric vehicles.

It is predicted that the new installed capacity of household energy storage like home battery backup  in Europe this year is expected to exceed 4GWh, with a year-on-year growth of 150%. By 2025, the scale of the global household energy storage industry will exceed 100 billion RMB.

This means that in the next few years, the global household storage market demand will continue to rise, bringing huge development opportunities to Chinese energy storage industry chain enterprises.