Review of the lithium battery industry chain in 2022: the profits of enterprises in the chain have increased significantly, and the raw material manufacturers are serving people with "lithium"
In 2022, the production and sales of new energy vehicles, as the main downstream of lithium batteries, increased by more than 90% year on year, driving up the expected profit of lithium battery industry chain enterprises in 2022. At the same time, the profits of the industrial chain show a trend of concentration to the upstream, and the sustainable and healthy development of the industry is facing new challenges.
China's production and sales of new energy vehicles are again experiencing explosive growth
In 2022, the global carbon emission policy will be gradually tightened, and new energy vehicles as a key industry of carbon reduction will develop at a high speed. At home, with the implementation of "carbon peak" and "carbon neutral" policies; Abroad, developed countries in Europe and the United States have also made constant efforts in the field of new energy vehicles. For example, the European Union requires that the sale of traditional fuel vehicles be banned from 2035, and the President of the United States signed the 2022 Inflation Reduction Act to further promote the development of domestic electric vehicles. Driven by both policy and market, the global new energy market has expanded rapidly to about 10 million vehicles, and China has accounted for nearly 70% of the market.
On January 12, 2023, the China Automobile Association said that under the dual role of policy and market, the total production and sales of new energy vehicles in 2022 were 7.058 million and 6.887 million, up 96.9% and 93.4% respectively year on year, continuing the explosive growth trend. The market share of new energy vehicles in the year reached 25.6%, and the production and sales of new energy vehicles had ranked first in the world for eight consecutive years.
Lithium battery industry chain profits increased significantly
Figure Some lithium industry chain enterprises' net profit increase in 2022 (industry online sorting)
In January 2023, a number of lithium industry chain enterprises disclosed the performance forecast for 2022, and the performance of enterprises in various fields of the industry chain, such as Tianqi Lithium, Polyfluoro, Tianci Materials, Ningde Times and BYD, showed explosive growth. When explaining the reasons for the substantial increase in the expected profit in 2022, the aforementioned enterprises mentioned the increase in sales and price of new energy-related products. It can be seen that the growth of terminal demand has brought a strong impetus to the development of lithium battery market. From lithium ore to battery volume and price, the whole lithium industry chain seems to be showing a thriving atmosphere.
However, the pre-earnings data of enterprises also seems to reveal a phenomenon that the lithium industry chain profits are rapidly concentrated upstream. At present, among the enterprises that have been announced, driven by the high lithium price, the net profit of the upstream enterprises with lithium mines has increased by more than 2 times over the same period of last year, with the highest of 6-10 times; In contrast, the enterprises in the middle and lower reaches of the industrial chain have also achieved a large increase in net profit, but most of them are less than twice. Even BYD, which holds the first place in the global sales of new energy vehicles in 2022, its growth is slightly less than that of the upstream enterprises.
Significant enterprise cost pressure
Figure Weekly market price trend of battery grade lithium carbonate and lithium hexafluorophosphate in China in 2022
Looking back on the whole year, the profitability of the upstream and downstream of the lithium battery industry chain does not match the product price changes. According to the industry online data, the supply gap of lithium raw materials expanded twice at the beginning and the end of 2022, and directly led to the increase of upstream raw material battery grade lithium carbonate from 280000 yuan/ton in the first year to more than 600000 yuan/ton in the fourth quarter. In contrast, in 2022, the price of lithium hexafluorophosphate, the main electrolyte of lithium-ion batteries, has been falling all the way down. At the end of the year, it has approached the cost line, and the profit margin has been almost exhausted; Further down, terminal car companies such as Great Wall Euler even said that they had to increase the price or suspend the order in order to cope with the cost pressure.
Admittedly, in the promotion stage of new energy vehicles, auto companies will sacrifice some benefits for the market space, but this also reflects that the rising price of lithium raw materials has been out of the control of the market mechanism, and is a unique product under the joint action of "national subsidy", auto companies' eagerness to promote products and speculation. The price rise of lithium ore will eventually be passed on to the end consumers, and to a certain extent, it will inhibit the release of terminal demand, which will further impact the stability of the industrial chain.
Looking forward to 2023, the market will gradually return to rationality
In 2023, the epidemic control at home and abroad will be gradually relaxed, the global lithium ore capacity will be further released, the import source will arrive in port smoothly, the growth rate of raw material supply on the site is expected to exceed the growth rate of demand, and the tight balance of global lithium raw material supply and demand may be relieved. Moreover, the decline of "national subsidy" will force lithium-related enterprises to strengthen cost control. Under the game of supply and demand, the prices of lithium ore, lithium carbonate and other upstream raw materials may show a downward trend.
In terms of terminal demand, the cancellation of the "national subsidy" has partially overdrawn the demand for new energy vehicles in 2023 to the end of 2022. From the perspective of the actual market performance, the industry did not expect the end of 2022 sales volume to rise, adding to the price increase of most auto companies, and the industry generally believed that the growth momentum of new energy vehicles in 2023 might slow down. With the further development of the new energy industry, the demand increment brought by the energy storage battery will gradually surpass the power battery and become the main application field of lithium battery products. The whole lithium battery industry still has a broad market space.
