Core Viewpoint - The demand for lithium batteries in the two-wheeler market is expected to grow significantly, driven by the implementation of new national standards for electric bicycles and the ongoing shift from lead-acid to lithium batteries [2][6]. Market Growth and Trends - In the first half of this year, domestic lithium battery sales for two-wheelers increased by 40% year-on-year [2] - The new national standard, effective from September 1, limits the battery voltage for electric bicycles to a maximum of 48V, which may further boost demand for small power batteries [2] - The total number of electric two-wheelers in China has reached nearly 400 million, with a potential replacement demand for over 110 million lithium battery packs [6] Company Strategies - Companies like Guoxuan High-Tech and BYD are entering the small power battery market, viewing it as a new growth area following power batteries and energy storage [2] - Other battery manufacturers, including Xingheng Power and Xineng An, are also establishing their own dealer and service networks to capture market share [4][12] Channel Development - The success of lithium battery companies in the two-wheeler market heavily relies on effective channel development, with a focus on building a robust network of dealers and service providers [3][5] - Xingheng Power has over 2,600 service points nationwide, collaborating with major two-wheeler brands to enhance market penetration [4] - Companies are also exploring online channels, with partnerships like Xingheng Power's collaboration with JD.com for battery installation and maintenance services [14] Product Features and Safety - Lithium batteries offer advantages such as longer lifespan (2000-4000 cycles) and higher energy density compared to lead-acid batteries, making them more appealing despite higher initial costs [7][11] - Safety concerns regarding lithium batteries are primarily linked to non-compliant modifications by small workshops, prompting leading companies to adopt stringent safety standards and certifications [9][10] Economic Considerations - While lithium batteries have a higher upfront cost, their longevity and reduced replacement frequency can offset the initial investment, making them economically viable over time [11] - The existing profit model for traditional electric vehicle dealers, which relies heavily on lead-acid battery replacement services, may be disrupted by the introduction of lithium batteries [12] Conclusion - The lithium battery industry is poised for growth in the two-wheeler market, with companies needing to focus on product development and channel strategies that align with consumer needs and market dynamics [15]