The lithium battery industry is poised at a critical juncture, marked by a transformative shift in supply and demand dynamics within its complex supply chain. As we approach 2024, forecasts from publicly traded companies reveal a stark dichotomy in their performance expectations. While several entities, including industry titan Ningde Times, anticipate significant growth in annual net profits, others face declining fortunes due to various market pressures and demands.

A notable development came on February 19, when Puliit announced plans to invest approximately 750 million yuan in constructing a cylindrical battery base in Malaysia, aimed at producing 2.5GWh of capacity. The company emphasized its ongoing commitment to innovating cylindrical battery technologies, highlighting this overseas venture as a strategy to better navigate shifts in market demand and policy landscapes. This expansion aims to fulfill the growing need for high-performance batteries across various sectors such as power tools and smart home appliances, thereby enhancing their global market share. Additionally, on February 14, Ganfeng Lithium disclosed that its wholly owned subsidiary, LMA, had commenced operations at its first phase of the Mariana lithium salt lake project in Argentina as of February 12.

Furthermore, companies like Penghui Energy, Haopeng Technology, and Yiwei Lithium Energy have recently unveiled advancements in production capacity and strategic collaborations. These initiatives span across new dimensions, including solid-state batteries and the catalytic development of AI-driven products. The industry is clearly in a phase of rapid evolution, adapting to the ever-changing landscape of energy solutions.

According to recent monitoring data from Gaogong Lithium, the production of domestic power batteries surged alongside new installations in January. This uptick represented a year-on-year increase of 20.1%, reaching 38.8GWh. Prices for various lithium battery materials are also rebounding, signaling a more robust demand outlook. Analysts suggest that as we look towards 2025, lithium battery demand is set to explode, entering uncharted territories with a potential for unprecedented growth.

As the industry releases performance predictions, it becomes increasingly clear that a "structural upgrade" is underway, leading to an accelerated market differentiation. Some companies, such as Penghui Energy, Tianqi Lithium, Shengxin Lithium Energy, and Ganfeng Lithium, anticipate varying degrees of revenue declines in 2024. These downturns are generally attributed to slowed demand growth in downstream markets and shifting dynamics within the new energy vehicle industry, compounded by a challenging operational environment within the lithium battery material supply chain.

In contrast, certain lithium industry giants or leaders in niche markets have optimistic projections on their 2024 performances. Notably, Ningde Times expects a decline in overall revenue; however, its net profits attributable to parent company shareholders are projected to increase year-on-year by 11.06% to 20.12%. Similarly, Yahua Group anticipates an astounding 596.26% to 720.60% growth in net profit due to a substantial increase in sales of lithium salt products alongside stable orders from major clients. This is indicative of a broader trend favoring established companies that can effectively ramp up production and streamline costs in the face of challenging market conditions.

Gaogong Lithium analysts have observed a significant shift in profit centers within the lithium battery supply chain, with earnings increasingly gravitating towards downstream entities. As companies navigate the difficult terrain of this industry, they are gradually moving away from a warfare-like mentality of price competition to cultivate sustainable profitability through smarter supply chain strategies.

The divergence in performance expectations reflects variances not only across different sectors within the lithium supply chain but also among individual enterprises. Overall, while some battery manufacturers remain yet to release their 2024 forecasts, evaluation of previous quarters suggests a likelihood of steady growth in performance. Meanwhile, in the lithium material side, a positive outlier exists with Zhongke Electric, which is projected to see surging profits against an overall backdrop of declining margins for most negative electrode manufacturers, while positive electrode companies are facing tighter profit conditions or slight recoveries. The electrolyte and separator segments are generally experiencing a reshuffling of performance metrics.

In the realm of equipment suppliers, the scenario is equally challenging as industry-wide capacity planning faces downward revisions, particularly with a reduction in newly added capacities. Consequently, many equipment manufacturers are seeing their new orders dwindle and increasingly depend on international markets. The performance forecasts indicate that many of these firms could experience profitability adjustments.

Despite the pressures faced by key players such as Ganfeng Lithium in terms of capacity outputs, numerous firms including Xian Dao Intelligent, Liyuan Heng, and Winbond Technology have recently secured new domestic and international orders. Industry insiders are optimistic, citing a rebound in overall industry sentiment, which hints at the onset of a new growth cycle. Most companies are cultivating a positive outlook when considering their performance expectations for 2025. For instance, Kadali, a supplier of structural components for power batteries, noted that in alignment with the current trend of growth within the new energy vehicle market, they are prepared to scale their operations according to market demands and expectations.