The demand in the electric vehicle industry has exceeded expectations, and the off-peak season in November and December is not weak. The demand for 2025 has been revised upwards to a growth of over 30%. The current valuation is at the bottom of profitability, with leading technology innovation and cost advantages highlighted. Profitability is expected to recover first, with supply and demand about to reverse, showing strong bullish sentiment.
Intelligence Finance and Economics App learned that Soochow Securities released a research report stating that domestic sales volume in Q4 2024 exceeded expectations, with the annual sales volume expected to be revised up by 1 million vehicles to around 13 million vehicles, a 37% increase. Expectations are positive for the continuous anticipation of domestic car consumption policies in 2025. Additionally, the electrification rate of vehicles in the 0.1-0.2 million price range is accelerating, expecting sales to maintain a 25% growth to around 16.28 million vehicles. Looking at the industry chain, supply expansion is slowing down, demand is recovering, and capacity utilization is significantly increasing. The Lithium Battery Association will unite enterprises to enhance self-discipline, and the trend of rebounding prices for low-cost orders is clear, with price elasticity showing a preference for Fe-LFP > LiNiCoAlO2 > copper foil > anode materials > lithium carbonate > separator.
The main viewpoints of soochow securities are as follows:
By 2025, the domestic electrification rate will continue to rise, with a turning point in new overseas models in 2026, maintaining a global electric vehicle growth rate of nearly 20%. Domestic sales volume exceeded expectations in Q4 2024, with the annual sales volume expected to be revised up by 1 million vehicles to around 13 million vehicles, a 37% increase. Expectations are positive for the continuous anticipation of domestic car consumption policies in 2025. Additionally, the electrification rate of vehicles in the 0.1-0.2 million price range is accelerating, expecting sales to maintain a 25% growth to around 16.28 million vehicles. Sales expectations for Europe and America in 2025 are stable, but a new vehicle cycle in the second half of 2025 is expected to boost growth in 2026. In 2024, the global electric vehicle sales volume is estimated to be 17.01 million vehicles, up by 27%. By 2025, the sales volume is expected to reach 20.83 million vehicles, a 22% increase, and it is projected to maintain an 18% growth in 2026.
With the support of energy storage, lithium battery demand is expected to grow by 25% in 2025, combined with restocking, no weakness in the off-peak season, and the likelihood of demand growth accelerating to 30%. It is estimated that the demand for mobile storage batteries in 2024 will be approximately 1409 GWh, a 30% increase year-on-year, with 330 GWh for energy storage, a 57% increase year-on-year. The share of pure electric vehicles is stabilizing in 2025, with an increase in energy density per vehicle. The demand for power batteries is estimated to be around 1351 GWh, a 25% increase, while large energy storage overseas is expected to surge with energy storage battery growth of 45% to 500 GWh. In total, global mobile storage demand is expected to reach 1851 GWh, a 31% increase year-on-year. At the same time, the industry chain is not weak in the first quarter, with clear demand for restocking, making it likely that lithium battery demand will be further revised upwards for the entire year.
The industry chain has passed its low point, with a price turnaround expected, and the price hike cycle likely to continue until the second half of 2025, until leading manufacturers return to reasonable profits. Supply expansion is slowing down, demand is recovering, and capacity utilization is significantly increasing. The Lithium Battery Association will unite enterprises to enhance self-discipline, and the trend of rebounding prices for low-cost orders is clear, with price elasticity showing a preference for Fe-LFP > LiNiCoAlO2 > copper foil > anode materials > lithium carbonate > separator. It is expected that prices will slightly rise and land in Q4 2024, while profitability of second and third-tier manufacturers within the industry remains weak, accelerating their clearance. A turning point in supply and demand is expected in the second half of 2025, continuing price increases are anticipated, and leading manufacturers may regain reasonable profits. At the same time, with more new products from leading companies and gradual effects of overseas expansion, the years 2025-2026 will witness a simultaneous increase in quantity and profits, opening up growth opportunities.
Soochow Securities believes that the demand in the electric vehicle industry has exceeded expectations, and the off-peak season in November and December is not weak. The demand for 2025 has been revised upwards to a growth of over 30%. The current valuation is at the bottom of profitability, with leading technology innovation and cost advantages highlighted. Profitability is expected to recover first, with supply and demand about to reverse, showing strong bullish sentiment.
Recommendations for investment symbols
Top battery players with stable structure and profitability: Contemporary Amperex Technology (300750.SZ), BYD (002594.SZ), EVE Energy Co.,Ltd. (300014.SZ), structural components: Shenzhen Kedali Industry (002850.SZ); and bullish on material leaders with profit flexibility, first recommending Hunan Yunnan Energy New Material (301358.SZ), Shangtai Technology (001301.SZ), Guangzhou Tinci Materials Technology (002709.SZ), followed by a positive outlook on Shanghai Putailai New Energy Technology (603659.SH), Shenzhen Capchem Technology (300037.SZ), Ningbo Ronbay New Energy Technology (688005.SH), Zhejiang Huayou Cobalt (603799.SH), CNGR Advanced Material (300919.SZ), Yunnan Energy New Material (002812.SZ), Shenzhen Senior Technology Material (300568.SZ), Shenzhen Dynanonic (300769.SZ), etc., focusing on Fulin Precision (300432.SZ), Jiangsu Lopal Tech. (603906.SH), Hunan Zhongke Electric (300035.SZ), etc.; at the same time, lithium carbonate prices have bottomed out, bullish on high-quality resource leaders, recommending Sinomine Resource Group (002738.SZ), Yongxing Special Materials Technology (002756.SZ), Ganfeng Lithium (002460.SZ), etc.
Risk Warning: price competition exceeds market expectations, unstable raw material prices, declining investment growth.
