Strong domestic performance
In the first quarter of 2025, China’s power battery market showed strong resilience and growth momentum, with both installed capacity and exports hitting record highs. According to statistics from the China Automotive Power Battery Industry Innovation Alliance, the cumulative installed capacity of domestic power batteries reached an astonishing 130.2 GWh, a year-on-year increase of 52.8%, setting a new high since the first quarter of 2020. At the same time, power battery exports soared to 37.8 GWh, a year-on-year increase of 21.5%. These data highlight the strong growth of China’s new energy vehicle industry and its increasing competitiveness in the global market.
Thanks to a series of government support policies, the domestic new energy vehicle retail penetration rate has soared to 51.1%. Measures such as scrapping and updating, old-for-new, and exemption of new energy vehicle purchase tax have effectively stimulated consumer demand. Industry expert Zhang Jinhui predicts that with the acceleration of electrification, the penetration rate of new energy vehicles is expected to exceed 55% by 2025. This trend not only demonstrates China’s determination to vigorously develop new energy vehicles, but also reflects the country’s strategic vision for sustainable transportation.
Changing Market Dynamics
In-depth analysis of the power battery market shows that the distribution of battery types has changed significantly. Lithium iron phosphate batteries (LFP) continue to dominate, with cumulative installed capacity reaching 105.2 GWh in the first quarter, accounting for 80.8%, a year-on-year increase of 93.6%, an astonishing increase. In contrast, the installed capacity of ternary batteries was 25 GWh, accounting for 19.2%, a year-on-year decrease of 19%. With its safety and cost advantages, lithium iron phosphate batteries have dominated the domestic market since July 2021, demonstrating strong competitiveness against the backdrop of shifting consumer preferences.
Looking around the world, although the growth rate of demand for new energy vehicles has slowed down, the emphasis on cost-effectiveness has made international automakers increasingly favor lithium iron phosphate batteries. Mainstream manufacturers such as Tesla, Volkswagen, Mercedes-Benz, and BMW all plan to increase the assembly share of lithium iron phosphate batteries, indicating their wide recognition of the technology. In addition, overseas battery manufacturers such as LG Energy Solution, Samsung SDI, and SK On have also begun to deploy lithium iron phosphate battery technology to further promote its development. However, it is worth noting that ternary batteries still dominate the international market, with exports accounting for 60.9%, a cumulative year-on-year increase of 31.9%, while the increase in lithium iron phosphate batteries is only 9.3%.
Corporate Leadership and Global Influence
In the competitive landscape of China’s power battery market, CATL and BYD continue to maintain their dominant position. CATL maintains a leading position in both lithium iron phosphate and ternary power battery installations, with market shares of 38.49% and 69.46% respectively. BYD mainly focuses on the battery supply for its own new energy vehicles, while also expanding its battery supply to major well-known automakers. This competitive environment not only promotes innovation, but also improves the overall quality and technical level of China’s power batteries.
China’s power battery market is booming, and its influence goes far beyond its borders. Power battery exports have created a large amount of foreign exchange income, promoted the development of related industries, and boosted economic growth. In addition, competition in the international market has also prompted Chinese battery manufacturers to increase their research and development efforts, thereby promoting technological innovation. The widespread use of power batteries also plays a vital role in reducing dependence on traditional fuels, reducing greenhouse gas emissions, and promoting global environmental sustainable development.
China’s continued leadership in electric vehicle batteries provides opportunities for international cooperation in the new energy sector. Power battery exports promote technology exchanges and resource sharing, and help to jointly address global energy challenges. In addition, China’s leading position in this field enhances its influence in global energy governance, making it a key player in shaping the future of sustainable transportation.
In summary, the strong performance of China’s new energy vehicle industry and its power battery market fully demonstrates China’s commitment to sustainable development. As the world increasingly turns to green energy, countries must recognize and support China’s progress in the field of new energy vehicles. By promoting cooperation and innovation, we can jointly create a more sustainable and greener future.
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Post time: May-22-2025