China’s Power Batteries Production & Installed Capacity Decline in January

China’s production and installed capacity of power batteries fell on a monthly and yearly basis for the first time in January as new energy vehicle sales slowed. The country produced about 28.2 GWh of power batteries last month, a 5 per cent year-on-year decrease and about 46 per cent lower than in December, according to a recent report from the China Automotive Battery Innovative Alliance. The Installed capacity of the month also slid by 0.3 per cent from the same period last year and 55 per cent the previous month to 16.1 GWh.

After 13 years of incentivising the sector, the Chinese government ceased the subsidies for clean energy vehicles by the end of 2022 which affected China’s NEV industry recently. According to figures from the China Association of Automobile Manufacturers, the country produced 425,000 units and sold 408,000 last month, down 6.9 per cent and 6.3 per cent, respectively, from a year ago.

The recent slump comes against the rapid growth the power battery industry clocked last year. According to CABIA numbers, the battery output surged 149 per cent to 545.9 GWh in 2022 from the previous year, as the installed capacity jumped 91 per cent to 294.6 GWh.

By installed capacity, the battery giant Contemporary Amperex Technology continued its streak of leading the market with 7.2 GWh in January and had a market share of 44 per cent. However, BYD seems to be catching up as the CATL’s lead over the second-ranked BYD is narrowing. BYD saw its market share rise to 34 per cent from 20.9 per cent in the same month last year.

The annual growth projection is also expected to come down this year. About nine million NEVs are expected to be sold in China this year, a 30 per cent increase from 2022. Comparatively, the annual growth rate was higher for 2022, which clocked an annual growth of 93 per cent over 2021 numbers, according to the CAAM.