New Energy does not need to look up at around 30 battery factories or go bankrupt

For automation and robotics companies, the 3C electronics and new energy sectors have become two of the most prominent and highly discussed industries. Especially with strong national policies and local government support, the new energy power battery industry has gained significant momentum. Within this sector, automation firms have increasingly focused their attention on both large and small battery manufacturers. However, as the industry matures, insiders are becoming more aware of the intense competition that is now taking shape in the power battery market. A wave of consolidation and elimination is approaching. Recently, reports emerged indicating that approximately 30 battery factories may shut down within the year, signaling a major shift in the landscape. The trend of eliminating weaker players is becoming inevitable. This year, the battery industry has experienced a mix of extremes—some parts are burning with growth, while others are freezing under pressure. The implementation of policies like the dual integration initiative and the planned ban on fuel vehicles have reinforced the country’s commitment to new energy, bringing hope for the future of power batteries. At the same time, challenges such as overcapacity, rising raw material costs, and downward pricing pressures continue to plague the sector. Looking at the lithium battery market this year, two clear trends have emerged. First, amid the surge in investment and mergers and acquisitions, competition among leading companies has intensified. Second, the adoption of ternary lithium batteries has significantly expanded in the power battery field. According to statistics from 2016 to mid-2017, there were 143 investment projects in lithium batteries and their upstream materials, with 123 of them announcing total investments of 230.7 billion yuan. Meanwhile, 63 restructuring projects were reported, with 60 of them disclosing transaction amounts totaling 130.6 billion yuan. As the industry expands, reports of overcapacity and fierce competition are also increasing. Companies like Ningde Era have launched their IPOs, while automotive giants such as SAIC, Dongfeng, and Changan are expanding rapidly. Some companies saw their valuations soar beyond 100 billion yuan. BYD, which already has a market value exceeding 100 billion yuan, began restructuring its battery division, aiming to commercialize its operations and accelerate its international expansion, including building the largest electric bus factory in the U.S. Lishen Battery set a "double 10 billion" target in 2017, aiming for over 10 billion in production capacity and sales. BAK Battery also announced a 14.3 billion yuan investment to build an industrial park in Shandong. With the expansion of production capacity, overcapacity and industry reshuffling are accelerating. Industry sources report that by the end of October, the cumulative installed capacity of lithium batteries reached 18.1 GWh, up 31.43% year-on-year. With 76 battery manufacturers contributing to effective installed capacity, the number is expected to reach around 80 by the end of the year. Last year, there were 109, meaning about 30 battery factories may go bankrupt this year, marking the start of a full-scale industry shake-up. In the eyes of industry insiders, the frenzy is driven by market demand. As of the third quarter, the top 20 Chinese power battery companies had a combined capacity of 102.2 GWh, far exceeding actual demand. Overcapacity is evident, and it's widely believed that only a few companies will remain in the long run.

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