Founded in 2001 and listed on Shenzhen GEM in 2009, EVE Energy（亿纬锂能）is now a global lithium battery company with core technologies and solutions for consumer, power, and energy storage batteries.
Consumer battery products cover lithium primary batteries, small lithium-ion batteries, and cylindrical batteries, and are widely used in automotive electronics, smart security, electronic nebulizers, smart wear, TWS earphones, power tools, electric two-wheelers, vacuums, and other areas. Comprehensive solutions for power batteries cover square ternary batteries, square lithium iron phosphate batteries, soft pack ternary batteries, large cylindrical batteries, and power and energy storage battery systems, which are widely used in the markets. Customers in the automotive sector include Nanjing Golden Dragon Bus（南京金龙）, Dongfeng Liuzhou Motor（东风柳汽）, HOZON（合众新能源）, XPeng Motors（小鹏）, Jaguar Land Rover(捷豹路虎), Daimler（戴姆勒）and BMW（宝马）.
Recently, EVE released a performance snapshot in 2022, EVE achieved operating revenue of CNY 36.305 billion, an increase of 114.82% year-on-year; a net profit of 3.51 billion yuan, an increase of 20.79% year-on-year. In 2022, the company's power battery shipments, including exports, were approximately 26.1 GWh, an increase of 116.3% year-on-year while global energy storage battery shipments totaled 142.7. In 2022, global energy storage battery shipments will total 142.7 GWh, up 204.3% compared to 2021 shipments of 46.9 GWh. EVE ranks third globally after CATL（宁德时代）and BYD（比亚迪）.
All-rounder EVE on the Road to Going Overseas
EVE is the leading lithium battery company in China and the top 10 in the power battery market. Over the past 22 years, it has seized opportunities in mobile phones, loT, TWS earphones, ETC, and e-cigarettes, and has developed synergistically with its multi-route layout.
Started with lithium primary batteries (2000-2009): At the beginning of 2020, the domestic electricity meter market all used imported lithium batteries, and the domestic lithium batteries had problems such as leakage and weak performance. EVE was committed to the design and development of lithium primary batteries. In 2009, as China's largest and the world's fifth-largest supplier of lithium primary batteries, EVE became one of the first technology companies to be listed on the Shenzhen GEM.
Expanding the e-cigarette business (2010-2014): The e-cigarette market abroad was in full swing in 2009. In April 2014, EVE acquired a large 50.1% stake in Smoore（麦克韦尔）for CNY 440 million. Since then, the e-cigarette industry has seen a major bloom. In July 2020, Smoore was listed on the Hong Kong Stock Exchange. Now Smoore is the world's largest manufacturer of electronic atomization devices, and the company will have a global market share of approximately 18.1% in 2022.
Launch of bean-type and ETC batteries (2015-2019): In 2016, Apple released the first generation of AirPods, setting off a boom in TWS headphones. By 2019, 129 million TWS headphones have been shipped for the year, up 179% year-on-year. In September of that year, EVE developed a new bean-type battery to cut into the Samsung supply chain. At the end of 2019, the national ETC customers reached a total of 204 million, a net increase of 130 million over the same period of the previous year, an increase of up to 166%.
From consumer batteries to power batteries (2018-present): In 2015, EVE entered the cylindrical 18650 field. In 2016, it ventured into square ternary batteries and lithium iron phosphate batteries, and in 2018, it cooperated with SK, a Korean battery company, to jointly invest in soft pack ternary system batteries. In 2020, EVE collaborated with BMW, Jaguar Land Rover, Hyundai Kia and other car company customers, and gradually penetrated into domestic customers. Revenue for the year was CNY 16.9 billion, up 107% year-on-year, of which, power battery revenue was CNY 10.007 billion, up 146.25% year-on-year, with revenue exceeding that of consumer batteries for the first time.
Enhancing Supply Chain Resilience and Actively Laying out Overseas Battery Capacity
The overseas customers of EVE include Porsche, Daimler, BMW, Hyundai Kia, etc. In March 2022, EVE announced the signing of a letter of intent with Debrecen in Hungary and the establishment of a power battery manufacturing plant there. It is reported that this is EVE's first plant in Europe and is expected to be operational by 2026. The plant is close to vehicle manufacturers such as Mercedes-Benz, BMW, Stellantis, and Volkswagen. According to EVE, this cooperation will effectively meet the company's future development needs for production land, and is conducive to all parties to give full play to their respective resources and advantages, to further expand the scale of power storage battery production capacity, to continue to consolidate and enhance the company's influence in the new energy industry, comprehensive competitiveness, and international level, is an important step to improve the company's global industrial layout.
In July of the same year, EVE Malaysia Sdn Bhd was officially inaugurated in Penang, Malaysia, and in October, EVE announced that the Malaysian company would invest up to USD 422.3 million in a cylindrical lithium battery manufacturing project with its own and self-financing funds. The project will build a production base in Malaysia with a new 21700-type ternary cylindrical battery production line to support electric two-wheelers and power tool manufacturers in Malaysia and Southeast Asia.
Large Cylindrical Batteries Go abroad to Break the Second Curve of Electric Vehicle Development
In September 2020, Tesla presented the new 4680 battery (a cylindrical battery with a diameter of 46mm and a height of 80mm), which featured high capacity, low production costs, and increased power. EVE expects that in the context of the continuous development of 4680 and other technologies, the global installed capacity of 4680 batteries is expected to reach 264 GWh in 2025.
As global power battery technology continues to innovate, EVE, as a latecomer in the power battery field, is looking to overtake the competition through 4680 technology. In 2021, EVE announced that it will invest in a large cylindrical battery production project with an annual capacity of 20 GWh for passenger cars. It is worth noting that in September of that year, EVE announced that its subsidiary in Hubei had received a letter of appointment from BMW to provide large cylindrical lithium-ion cells for the Group's Neue Klasse series. The BMW Group's strategic plan for electrification is to deliver over 2 million pure electric vehicles worldwide by the end of 2025.
A Strategy Based on Local Roots and Local Service
EVE has set up sales companies and offices in the US and Germany. The German office is located in Munich and is not only responsible for sales but also for after-sales, logistics, and related services. By setting up a local company and recruiting local talent, EVE is able to better understand the local market and customer needs, and provide better localized services. In addition, local talent is able to provide marketing strategies and sales skills that are appropriate to the local culture and market environment. Through local roots and local service strategy, EVE is able to improve its competitiveness in the local market and thus achieve its goal of providing a more valuable service on a global scale.
ESG is also of great concern to Chinese battery companies in the process of manufacturing abroad. Overseas markets, especially the EU, pay more attention to carbon emissions. EVE is committed to low-carbon manufacturing, focusing on green manufacturing, and the factories in Huizhou and Jingmen have been awarded as national green factories. We are following EU and international regulations to improve the use of recycled materials in production, such as using more nickel, cobalt, manganese, and other recycled metals. In addition, more environmentally friendly packaging materials will be used in logistics to achieve more efficient and low-carbon transportation.
What is the Next Step for EVE to Break through the Development Bottleneck?
The battery industry is highly competitive, with leading domestic and international companies such as CATL, BYD, LG and Samsung competing for market share, and EVE needs to maintain its leading edge in technology and production costs to remain competitive.
In the Chinese market, the market share of CATL and BYD has always been maintained at over 60%, which means that the remaining less than 40% of the market share is bound to be a "fierce battle". On the one hand, the development of the power battery industry is caught in a bottleneck, and the development path of the manufacturers are similar. At the same time, the power battery is a heavy asset, a heavy investment in the industry, which means that whoever has mastered the production capacity will be able to get a share of the market.
There is still a gap between EVE and CATL and BYD in terms of production capacity. CATL has a capacity of 390GWh in FY2022, with 152GWh under construction and 83.4% capacity utilization. In terms of overseas production capacity layout, CATL has set up overseas factories in Germany and Hungary to enhance local production and supply capacity for European customers, helping European electrification and energy transformation. BYD has put into production and under construction, a power battery production capacity of about 286GWh, and the total production capacity in 2023 is planned to reach 396GWh, which can meet the installed demand of nearly 8 million vehicles.
Since 2022, EVE's capacity expansion has accelerated significantly, but the gap is still obvious, currently has capacity planning in Hubei Jingmen, Guangdong Huizhou, Sichuan Chengdu, Yunnan Yuxi, and Shenyang, Malaysia. 2022 end of production capacity of more than 100GWh, 2023 end of production capacity will exceed 200GWh.
In terms of market share, there is a gap between EVE and the first-tier companies in terms of supply chain integration and yield rate. The downstream customers of EVE are mainly concentrated in the field of commercial vehicles such as buses and logistics vehicles. And according to Global Battery Market Trends and Outlook 2025 Report published by Goldman Sachs, global sales of new energy vehicles are expected to reach 18.43 million units in 2025, an increase of about seven times compared to 2.29 million units in 2019, with a CAGR of 40.6%. It is foreseeable that electric vehicles will become the mainstream of the future.
In comparison, the small number of mainstream customers will also curb the further development of EVE. In the field of new energy vehicles, car companies need more advanced batteries, and battery companies need to bind the downstream market to maximize benefits. In 2023, EVE also needs to enhance customer expansion, further strengthen the cooperation of head car brands and expand its market share.