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China's battery sector faces consolidation, declining investment amid slowing EV sales
(MENAFN) China’s battery sector is experiencing a wave of mergers and consolidations, leading to a significant reduction in investment and the cancellation of numerous large-scale projects. In the first seven months of this year alone, 19 major battery factory projects in China have been either cancelled or postponed, according to Benchmark Mineral Intelligence, a London-based research firm. This trend is indicative of a broader downturn in battery investment as electric vehicle (EV) sales slow, particularly in Europe, which has been a major market for battery manufacturers.
The consolidation within China’s battery industry is marked by falling prices and struggling revenues, which have prompted many smaller companies to abandon their investment plans. Benchmark analyst Evan Hartley predicts that these disruptions could lead to a reduction in the capacity of China's massive battery factories by up to 3 percent by 2030. This development highlights the growing challenges within the industry, as major players like CATL and BYD continue to push forward with their expansion strategies despite the market turbulence.
Globally, the slowdown in electric vehicle sales is contributing to the sector’s woes. After experiencing robust growth in the past, EV supply chain consultancy RHOMotion forecasts a decline in sales growth in Europe and North America by 6 percent and 7 percent, respectively. The Chinese auto industry, which has seen significant expansion during a previous investment boom, now faces a highly competitive environment with approximately 50 local groups producing electric vehicle batteries. This crowded market is driving intense competition for technology and increasing the pressure of stricter government regulations, making survival increasingly challenging for many players in the sector.
The consolidation within China’s battery industry is marked by falling prices and struggling revenues, which have prompted many smaller companies to abandon their investment plans. Benchmark analyst Evan Hartley predicts that these disruptions could lead to a reduction in the capacity of China's massive battery factories by up to 3 percent by 2030. This development highlights the growing challenges within the industry, as major players like CATL and BYD continue to push forward with their expansion strategies despite the market turbulence.
Globally, the slowdown in electric vehicle sales is contributing to the sector’s woes. After experiencing robust growth in the past, EV supply chain consultancy RHOMotion forecasts a decline in sales growth in Europe and North America by 6 percent and 7 percent, respectively. The Chinese auto industry, which has seen significant expansion during a previous investment boom, now faces a highly competitive environment with approximately 50 local groups producing electric vehicle batteries. This crowded market is driving intense competition for technology and increasing the pressure of stricter government regulations, making survival increasingly challenging for many players in the sector.
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