Battery companies seek to differentiate themselves for a competitive edge

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The latest data released by the China Automotive Power Battery Industry Innovation Alliance show that from January to March, the total output of power and energy storage batteries in China was 487.4 gigawatt-hours, representing a year-on-year increase of 49.3%. Industry experts point out that the data indicates an overall upward trend in the health of the battery industry at present. In terms of the competitive landscape, the leading enterprises maintain a relatively stable position, while second- and third-tier firms are actively seeking ways to differentiate themselves and stand out. Meanwhile, technological iteration has entered a critical phase of multiple breakthroughs. The industry’s growth drivers are becoming more diversified, and it is steadily advancing toward a new stage characterized by quality improvement and technology leadership. Energy storage batteries serve as the main growth driver. Based on sales data, in the first quarter of this year, both the production and sales of power and energy storage batteries continued to show strong year-on-year growth. With the deepening of the global energy transition and the effective implementation of relevant policies, the installed capacity of new energy storage systems is growing steadily, becoming the main driver of overall growth in the battery industry. Data shows that from January to March this year, the cumulative sales volume of power and energy storage batteries in China reached 437.1 GWh, a year-on-year increase of 52.9%. Among them, the cumulative sales volume of power batteries reached 291.9 GWh, a year-on-year increase of 34.3% ； The cumulative sales volume of energy storage batteries reached 145.1 gigawatt-hours, showing a significant year-on-year increase of 111.8%. Industry analysts note that, based on the data, sales growth of energy storage batteries in the first quarter was about three times that of power batteries, indicating a shift in the industry’s growth focus toward energy storage. It is understood that in the first quarter, the domestic power battery market experienced a correction, which is related to changes in the structure of the end-market. On one hand, affected by the Spring Festival holiday, the first quarter is typically a traditional off-season for the power battery industry ； On the other hand, starting from January 1, 2026, the purchase tax policy for new energy vehicles has been changed from “completely exempted” to “halved”. The resulting increase in vehicle purchase costs somewhat dampens consumers’ willingness to buy such vehicles. However, thanks to factors such as car manufacturers’ efforts to meet sales targets and their need to replenish inventory at the end of the first quarter, the domestic power battery market showed signs of recovery in March, with installation volume reaching 56.5 gigawatt-hours, a 114.9% increase on a month-on-month basis. As technological advancements accelerate, the export of power and energy storage batteries also maintains a rapid growth rate. Data shows that from January to March, China’s total exports of power and energy storage batteries reached 84.1 GWh, a year-on-year increase of 36.7%. Among them, the cumulative export of power batteries was 56.8 gigawatt-hours, representing a year-on-year increase of 50.3% ； The cumulative export volume of energy storage batteries was 27.3 gigawatt-hours, representing a year-on-year increase of 15.0%. Along with the growth in production and sales, the technological iteration and upgrading within the industry are also accelerating. In terms of material types, lithium-ion batteries are currently the mainstream choice in the fields of power and energy storage. Among them, lithium iron phosphate batteries hold a dominant position due to their cost and safety advantages. According to the estimated data on the demand for key materials used in power and energy storage batteries, released by the China New Energy Vehicle Power Battery Industry Innovation Alliance, from January to March, China used 179,000 tons of ternary materials for such batteries, and 994,000 tons of lithium iron phosphate materials ； A total of 81,000 tons of electrolyte was used for ternary batteries, while 596,000 tons was used for lithium iron phosphate batteries. Furthermore, from a technological trends perspective, in addition to lithium batteries, emerging technologies such as solid-state batteries and sodium-ion batteries are also gaining prominence, with the potential to reshape the industry landscape. Taking solid-state batteries as an example, their performance is suitable for applications in new energy vehicles, high-end energy storage, and low-altitude eVTOLs. Since the beginning of this year, various companies including Guoxuan High-Tech and Sunwoda have disclosed progress on the research and development as well as mass production of related products, with the industrialization process accelerating continuously. Industry experts say that companies in the battery industry chain are continuously exploring new technological approaches and expanding the application areas for their products. From the perspective of the competitive landscape, leading companies in the industry maintain their advantageous position thanks to strengths such as technology and production capacity, while mid-tier and lower-tier companies actively seek differentiated strategies to overtake their competitors amid technological changes. Through joint efforts from multiple parties, the industrial ecosystem is being improved. Beneath the surface of prosperity, the power and energy storage battery industries are also going through a “painful transition period.” Irrational competition, characterized primarily by product homogenization and disorderly “price wars,” has become evident. In a bid to secure orders, some companies resort to selling battery cells or battery products at prices below their production costs. As a result, leading enterprises are making minimal profits, while second-tier firms are incurring losses—a situation that poses potential risks to product quality and safety. On April 9, relevant departments including the Ministry of Industry and Information Technology, the National Development and Reform Commission, the State Administration for Market Regulation, and the National Energy Administration jointly held a symposium for enterprises in the power and energy storage battery industry to address measures for regulating competition within the sector. This is the second symposium on combating over-competition held by the relevant authorities this year, indicating that efforts to regulate the competitive landscape in the power storage battery industry are advancing further. Zhang Hong, a member of the expert committee of the China Automobile Distribution Association, suggested that battery companies should focus on specific niche areas or emerging technologies, and use technological breakthroughs to develop unique product or service advantages in order to avoid homogeneous competition. It also actively joins self-regulatory organizations such as industry associations and chambers of commerce, participates in the development of industry standards and norms, and works together to resist unfair practices such as price-based competition and vicious competition.