On the evening of May 13, Zhongke Electric announced that it intends to spend 2.5 billion yuan to invest in the "annual output of 100,000 tons of lithium battery cathode material integration project", which has become a miniature of the lithium industry chain to accelerate investment.

Since this year, lithium companies continue to accelerate the pace of expansion, tens of billions of investment. Industry insiders said that the medium and long-term prospects for the development of new energy vehicle industry is good, which allows a large expansion of the production of lithium companies to eat a "pill".

Investment enthusiasm continues

On May 11, the latest data disclosed by the China Association of Automobile Manufacturers (CAAM) showed that the production and sales of new energy vehicles reached 312,000 units and 299,000 units respectively in April, down 33.0% and 38.3% year-on-year, although up 43.9% and 44.6% respectively.

Even so, the investment enthusiasm of lithium industry chain companies has remained undiminished. Since this year, CATL, China Innovation Aviation, Painan Technology, Betrayal, Yiwei Lithium Energy, Sansun shares and other leading companies have announced to increase their investment in the lithium battery industry chain, with tens of billions of dollars of investment constantly.

On May 11, the company announced that it had signed a 30GWh power and energy storage battery expansion project with Wuhan Economic Development Zone, with a total investment of 12 billion yuan. The first phase of the project was signed in May last year, with a planned output of 20 GWh. After this expansion, Sinova's planned battery production in Wuhan will reach 50 GWh.

Take PAI Energy Technology as an example, on May 10, the company announced that it intends to invest 5 billion yuan in the construction of a 10GWh lithium battery R&D and manufacturing base project in Feixi County, Hefei City, which will be built in two phases and is scheduled to be put into operation in 2024. The company said in a recent institutional research that it plans to build close to 4GWh production this year.

Behind the accelerated expansion of lithium companies, 2021 fixed tide undoubtedly played a key use. According to our securities newspaper reporter statistics, 2021 lithium listed companies intensively announced fixed increase pre-proposal, plans to raise a total of nearly 150 billion yuan, used to expand production, new technology research and development, etc., which is undoubtedly for this year's lithium companies to expand the preparation of sufficient "food and grass".

Boost production of anode materials

In the various aspects of the lithium industry chain, cathode materials have become a key area of investment.

On May 11, the company announced that it had started construction of a 200,000-tonne-per-year lithium battery cathode material integration base project in Dali, Yunnan Province. According to the company, the project will greatly enrich the company's anode material supply capacity upon completion. Not long ago, Betrayal just announced the launch of a 40,000 tonne per annum high-end lithium battery anode material project in Shenzhou City, Hebei Province, with a total investment of RMB 5 billion.

Meanwhile, another anode material leader, Sansun, recently announced its intention to set up a project company in Anning City, Yunnan Province and invest in the construction of an integrated base project with an annual output of 300,000 tons of lithium battery anode materials, with a total planned fixed asset investment of approximately RMB 9.7 billion.

In addition to direct investment, in mid-April, Sugun also announced that it intends to increase the capital of its holding subsidiary Shanghai Sugun Lithium by RMB 3.05 billion and introduce four strategic investors, namely, Asking Investment, BYD, Ningde New Energy and Kunlun Capital.

In fact, not only is the leading negative electrode company firm pace of expansion, even the off-site companies can not help but "eye red", have crossed the layout. For example, on May 11, pump manufacturer Junhe announced a notice to subscribe for an additional 90 million yuan of registered capital of Heilongjiang Hagong Graphite with 450 million yuan in cash. Junhe said that the company invested in Hagong Graphite on the premise of its main business in the water pump industry to actively expand the field of new energy negative electrode materials and cultivate new profit upside.

Another example is that Jereh, which is engaged in oil and gas field equipment, technical engineering services and oil field development, has cut into the new energy track in 2021. A few days ago, the company said at a performance presentation that the company's 100,000-ton annual output of lithium battery cathode materials project in Tianshui City has started construction and is expected to be completed in September and put into trial operation at the end of the year.

Behind the investment heating up, negative electrode materials as the core link of the upstream of lithium batteries, is showing broad development prospects. According to Soochow Securities, global demand for anode materials is expected to be 621,000 tons in 2022, up 54% year-on-year. Among them, the domestic demand is 383,000 tons. In the medium to long term, global demand for negative electrode materials is expected to reach 1.613 million tons in 2025, with a three-year compound growth rate of 37.5%.

Broad industry outlook

From the production and sales data, although the April new energy vehicle production and sales growth rate fell year-on-year, but 1-April new energy vehicle production and sales reached 1.605 million units and 1.556 million units respectively, up 1.1 times year-on-year, still maintained the momentum of high-speed rise.

Shanxi securities research report said that with the easing of the epidemic around the production company to resume production and resume work rate gradually, May car production and sales is expected to improve, is expected to reach about 6 million units of new energy vehicle sales for the year probability is greater.

In the medium to long term, the outlook for the development of the new energy vehicle industry remains broad. The report published by Deloitte predicts that, along with traditional car companies and new car manufacturers accelerating their efforts at the same time, consumers' attention and acceptance of new energy vehicles is gradually rising, and the production and sales of pure electric vehicles in China's market will exceed 15 million units in 2030.

Driven by the rapid rise in sales of new energy vehicles, the installed capacity of power lithium batteries has risen. The latest data released by China's Automotive Lithium Battery Industry Innovation Alliance shows that from January to April, the cumulative installed capacity of China's power lithium batteries reached 64.5GWh, up 104.1% year-on-year.

The medium and long-term outlook for the development of the power lithium battery industry remains positive. According to EVTank, global demand for power lithium batteries is expected to officially enter the TWh era in 2025 and reach 2,661GWh in 2030, with a compound annual rise rate of over 46%.