Caixin
Aug 08, 2019 06:59 PM
BUSINESS & TECH

Big Battery-Maker's Market Share Surges as Bus-Makers Race to Place Orders

A CATL facility in Ningde, Fujian province, on Aug. 8. Photo: VCG
A CATL facility in Ningde, Fujian province, on Aug. 8. Photo: VCG

China’s largest lithium-ion battery-maker, Contemporary Amperex Technology Co. Ltd. (CATL), has further entrenched its dominance — this time on the back of China’s electric bus boom.

The Shenzhen-listed company increased its market share to 67% in July, up from 49% the previous month, while the share held by its nearest rival BYD Lithium Battery Co. Ltd. fell to 12.5% from 16.8%.

In July, CATL added installed battery capacity of 3.3 gigawatt-hours (GWh), while Shenzhen-based BYD added 1.1 GWh.

Founded in 2011, Fujian-based CATL has built its clout in the battery industry by riding on the back of China’s decadelong electric car boom.

BYD is one China’s largest electric-car makers, and while it has been seeking external clients the batteries it makes are still primarily used for its own vehicles.

CATL’s month-on-month surge in installed capacity is largely due to increased orders by manufacturers of electric buses, which have scrambled to forge deals with battery-makers in the run-up to a massive subsidy cut in early August.

Years of generous handouts have built China into the world’s largest electric car market, but Beijing has announced it will phase out industry subsidies completely by the end of next year.

The latest phase of that policy, in effect from June, slashed subsidies for electric passenger vehicle manufacturers by 50%. This month the same cut will come into effect for manufacturers of electric buses.

Statistics from Shenzhen-based industry consultancy Gaogong show CATL’s July battery orders for two major bus manufacturers — Yutong Bus Co. Ltd. and Zhongtong Bus Holding Co Ltd — shot up by 243% and 352% respectively from the previous month.

In contrast, CATL’s battery orders for passenger-car makers declined sharply. Cui Dongshu, secretary-general of the China Passenger Car Association, said CATL’s total volume of installed battery capacity for buses was five times that for passenger vehicles for the month.

The passenger car subsidy cut also hit BYD’s sales in July. The company sold 1.2% fewer passenger cars — 16,000 units — its first decline in 2019.

BYD, which initially pursued battery production in order to secure its supply chain, ramped up efforts last year to sell batteries to other automakers to broaden its revenue sources. Last month the company announced it had formed a partnership with Japanese automaker Toyota to cooperate on areas including electric car batteries.

Contact reporter Mo Yelin (yelinmo@caixin.com)

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