【SMM analysis: In March, the production of power batteries increased by 52% month-on-month, with expectations for further growth in April.】

In March, China's power battery production reached 65.9GWh, representing a 52% increase compared to the previous month and a 20% increase year-on-year. In March, many new energy vehicle companies chose to launch price wars ahead of schedule, resulting in a significant increase in sales of new energy vehicles and a penetration rate of 45%. The weak price reduction of fuel vehicles also led to new energy vehicles seizing a larger market share. Overall, the growth in the car market in March exceeded expectations, with significant efforts to reduce inventory levels at the dealership level. Against the backdrop of increasing demand expectations in April, the demand for backup power batteries is better than expected. It is expected that in April, with the continued impact of price promotions for new energy vehicles and the influx of new models at the Beijing Auto Show, the power battery market is expected to achieve a 7% increase compared to the previous month. From a cost analysis perspective, with the price increase of lithium battery raw materials in March and the subsequent transmission of costs, the costs of ternary and iron-lithium batteries have increased. According to SMM's calculations on April 3, 2024, the cost of square lithium iron phosphate battery cells is 0.40 yuan/Wh, and the cost of NCM523 ternary battery cells is 0.48 yuan/Wh, widening the cost gap between ternary and iron-lithium batteries.