Global Electric Vehicle Battery Makers_Monthly Recharge_ 2025 Outlook

Summary of Global Electric Vehicle Battery Makers Conference Call Industry Overview - Industry: Global Electric Vehicle (EV) Battery Market - Key Forecasts: - Global EV sales (BEV + PHEV) expected to rise 22% year-on-year (y/y) to 21 million units in 2025, achieving a penetration rate of 24% [2][10] - Global battery demand (EV + ESS) projected to increase by 25% y/y, with a compound annual growth rate (CAGR) of 21% through 2030 [2][10] - By 2030, global EV market share is estimated to reach 49%, with China at 84% and ex-China at 37% [2][10] Regional Insights Europe - 2025 EU EV Sales: Expected to rise 29% y/y to 4.1 million units, leading to a 33% y/y increase in battery demand [3][20] - Market Share Changes: K3 (LGES, SDI, SK On) share expected to decline to 57% (-9 percentage points), while Chinese battery makers' share (including CATL) is projected to rise to 40% (+7 percentage points) [3][20] - Cost Advantage: A ~40% cost advantage for Chinese battery imports is influencing market share dynamics, resulting in low utilization rates for K3 [3][20] - Regulatory Risks: EU member states are advocating for CO2 compliance flexibility, which poses downside risks to EV demand [3][20] United States - 2025 US EV Sales: Anticipated to increase by 9% y/y to 1.7 million units, with a 15% y/y rise in battery demand [4][15] - Policy Uncertainty: Concerns over EV incentives and tailpipe emissions could lead to further revisions in forecasts, impacting the Korean EV supply chain's growth and profitability [4][15] - K3 Market Share: Expected to increase from 48% in 2024 to 74% in 2030, despite geopolitical tensions limiting Chinese battery makers' presence in the US [4][15] Key Players and Stock Recommendations - Top Picks: - Korea: LG Chem rated as a Buy, while Samsung SDI is rated Neutral [5][6] - China: CATL and BYD are preferred due to their strong market positions [5][6] - Least Favored: EcoPro BM and SK IE Technology rated as Sell due to unfavorable market conditions [5][6] Market Dynamics - LFP vs. NCM: The market is shifting towards lithium iron phosphate (LFP) batteries, with expectations that LFP will account for 60% of EU demand by 2030 [11][42] - Utilization Rates: K3's utilization rate in the EU is projected to remain below break-even levels, impacting profitability [21][36] - Chinese Imports: Chinese battery makers are expected to gain market share in the EU, driven by competitive pricing and strategic partnerships [20][41] Risks and Challenges - Policy Risks: Uncertainties surrounding US EV incentives and EU CO2 regulations could hinder market growth [12][16] - Geopolitical Tensions: The inclusion of CATL on the US Defense Department's Chinese Military Companies list raises concerns about supply chain stability [40][41] - Market Overcapacity: The industry faces challenges related to overcapacity and low demand, particularly in the US market [17][30] Conclusion The global EV battery market is poised for significant growth, driven by increasing EV sales and battery demand. However, regional disparities, policy uncertainties, and competitive dynamics present challenges that stakeholders must navigate. The focus on LFP technology and the shifting market shares between Chinese and Korean manufacturers will be critical in shaping the future landscape of the industry.