[SMM Analysis] Market Analysis of Ternary Battery Cells in China's Consumer Sector

With the development of markets such as power tools, electric two-wheelers, and smart home devices, the small power battery market is experiencing rapid growth. Ternary cylindrical batteries are widely used in the small power sector due to their high energy density and good cycle life. Most cylindrical batteries use steel shell packaging, which provides good mechanical strength and protection performance, while some cylindrical batteries use polymer shells, offering more design flexibility and lightweight advantages. According to specifications, cylindrical batteries can be divided into:
18,650 model: Lithium battery with a diameter of 18mm and a height of 65mm, featuring high energy density, widely used in small appliances such as laptops and mobile phones, with a capacity range between 1,200mAh and 3,500mAh;
21,700 model: Lithium battery with a diameter of 21mm and a height of 70mm, with a higher volumetric energy density than the 18,650 model, widely used in digital devices, power tools, etc., with a capacity range between 3,000mAh and 4,800mAh;
4,680 model: New generation large cylindrical battery with a diameter of 46mm and a height of 80mm, using new materials and technologies such as tabless design and silicon-carbon anode, offering 5 times the energy and 6 times the output power compared to the 21,700 battery cell.

Demand side, after the power tool industry underwent inventory reduction from 2022 to 2023, the industry chain inventory is expected to gradually return to reasonable levels starting in 2024, with current demand being relatively strong. The interest rate cut in the US will further drive sustained high growth in overseas demand. Meanwhile, the electrification of two-wheelers overseas is accelerating. The Indonesian government has set a goal to convert 20% of fuel-powered two-wheelers to electric two-wheelers by 2025, reaching 1.8 million units, and plans to sell only electric two-wheelers starting in 2040. Thailand has also introduced cash subsidy policies to promote electric two-wheelers.

Supply side, according to SMM data, the production of consumer battery cells in 2024 is expected to reach 77GWh, with ternary consumer battery cells accounting for 57%. In terms of market structure, EVE Energy occupies the top position in the ternary consumer battery cell industry, with a CR5 of 41%, indicating a high market concentration.

Price side, according to SMM data, the prices of ternary cylindrical battery cells have been slowly declining since the beginning of this year. The latest prices are 4.58 yuan per unit for 523 cylindrical 18,650 ternary battery cells, 7.75 yuan per unit for 811 cylindrical 18,650 ternary battery cells (3.2Ah), and 13.15 yuan per unit for 811 cylindrical 21,700 ternary battery cells (4Ah). Despite the current strong demand, the prices are still difficult to rise due to intensified competition and fierce price wars in the ternary consumer battery cell market. It is expected that the ternary consumer battery cells will continue to fluctuate downward this year.