Battery Industry how to distribute the profit of the chain? This may become an important issue throughout 2025.

China's lithium battery industry has experienced more than ten years of rapid development, and its industrial cycle has been ups and downs. Through the development process of lithium battery, the prices and profits of upstream and downstream industrial chains are constantly changing. Among them, the rising price of upstream raw materials and materials has obviously disturbed the industrial chain, such as the rising price of cobalt, nickel and lithium, to varying degrees, it affects the profit distribution of upstream and downstream enterprises, and indirectly promotes the renewal and replacement of battery technology.

The short-term mismatch between supply and demand in the upstream and downstream of the lithium battery industry can be seen behind each cycle change and each round of material price increase tide.

Since 2022, prices represented by lithium carbonate have risen and fallen, reflecting this contradiction.

Since 2022, the price of a series of lithium battery materials has soared in lithium carbonate, making upstream enterprises earn a lot of money. However, the following market drops, and material enterprises have become the most injured link. With the impetus of inventory removal and capacity removal, many enterprises' losses have increased.

Compared with the previous cycle changes, this round of lithium price cycle adjustment time is longer, the fluctuation range is larger, beyond the market expectations, but also make lithium battery enterprises in it feel more sensitive.

2024 is a year of deep bottling of materials and cell prices. It is also a year for the industry to reverse price fluctuations and reshape the industry ecology. From materials to cell, enterprises have gradually realized the importance of the stability of upstream and downstream prices to the sound development of the industry. Moreover, it is becoming a consensus to build a sustainable and profitable supply chain rather than a rapidly rising and falling supply chain.

Looking forward to 2025, according to the data of the Institute of Advanced Industrial Research (GGI), under the background of the end of industry prices and the ebb of production capacity, the profits of the whole industry chain are expected to be repaired.

2022-2024: how to distribute industry profits

according to the performance data disclosed by major listed companies, from 2022 to 2024, industry profits have changed significantly in different links.

In 2022, the main profits of the industry were concentrated in the upstream., the total profit of the main lithium salt and material enterprises is 161.7 billion yuan, the profit of lithium mining enterprises is 112 billion yuan, and the profit of ternary positive electrode, lithium iron phosphate positive electrode, negative electrode and diaphragm are 9 billion yuan, the profit of electrolyte enterprises reached 14 billion yuan; In the battery link, the total profit of major domestic battery enterprises was 40.4 billion yuan, while the total profit of major equipment enterprises reached 7.4 billion yuan.

In 2023, the industry profits of major lithium battery listed companies decreased from more than 200 billion yuan in 2022 to 125.9 billion yuan. During this period, the profits of major lithium salt and material enterprises were cut by more than half, and the total profits were 61 billion yuan. Among them, the profits of lithium mining enterprises declined.To 52.1 billion yuan, lithium iron phosphate cathode enterprise directly lost, the total profit was-5.4 billion yuan, the total profit of ternary cathode enterprise was 4.2 billion yuan, the negative electrode was 4.2 billion yuan, and the electrolyte was 5.8 billion yuan; Battery link, the total profit of major battery enterprises rose from 40.4 billion yuan in 2022 to 51.6 billion yuan; The equipment enterprises were relatively stable and maintained at the level of 7.1 billion yuan.

Q1-Q3, 2024, the overall profit of the industry declined further, with a total profit of 65.2 billion yuan. From the point of view, the total profit of the main lithium salt and material enterprises is only 16.3 billion yuan, and the lithium iron phosphate cathode material enterprises continue to face losses, reaching a loss of-1.9 billion yuan, and the total profit of the ternary cathode dropped to 1.8 billion yuan, the total profits of lithium mining enterprises fell to 10.5 billion yuan, the total profits of diaphragm enterprises fell to 1.7 billion yuan, the total profits of electrolyte enterprises fell to 1.9 billion yuan, and the profits of negative enterprises fell to 2.3 billion yuan. In the battery sector, the total profit of major battery enterprises reached 43.4 billion yuan, while that of equipment enterprises reached 5.4 billion yuan.

In terms of proportion, from 2022 to 2024, the profit proportion of battery enterprises in the whole industry rose from 19% to 67%; the profit proportion of major lithium salt enterprises decreased from 53% in 2022 to 16%, while the profit proportion of most other materials enterprises declined to varying degrees, the profit proportion of equipment enterprises increased from 3.5% to 8.3%.

Through the period of soaring upstream material prices, under the industry callback, the profit center finally leads to the battery link, which also shows that the battery enterprise plays a core position in the whole industrial chain.

2025: Gross profit mean regression in each link

However, from the perspective of gross profit margin of sales, this change in the proportion of profit is more reflected in the return of gross profit margin in different links. For example, in the lithium battery link, the gross profit margin of sales of major battery enterprises from 2022to 2024was maintained at 10-20% as a whole.

Under the condition that the gross profit margin remains basically stable, the profit growth of battery enterprises is more based on the increase of the overall shipment of lithium batteries.

The profits of the other lithium battery main materials have declined sharply, which is more based on the mean regression of sales Gross profit margin. According to GII data, the average gross profit rate of electrolyte and negative electrode industry in the first half of 2024 was 15.5% and 19%, while that of diaphragm industry in the first half of 2024 was 25.2%.

According to the data, the gross profit margin level of some material enterprises has returned to a level similar to that of battery enterprises.

Of course, in the past two years, the price disturbance, the decline of gross profit margin and profit decline data of upstream lithium salt and material enterprises do not match, and the decline rate of net profit of material enterprises is faster than the decline rate of gross profit margin.

Among them, the inventory price drop caused by the price drop has a significant impact, thus expanding the profit drop of lithium salt and material enterprises. With the stable price of the industrial chain, the net profit performance and gross profit margin data of material enterprises will also return to the same.

based on the above data and GGII, in 2025, the price ended and the profit of lithium battery industry was repaired. It was not only the price rise, but also the profit correction brought by the clearing of high-priced inventory in the early stage.

More importantly, after the current cycle adjustment, under the condition that the supply and demand of the whole industry are becoming more and more stable, reasonable profits and reasonable Gross profit performance will run through the entire upstream and downstream industrial chain.