At the end of 2021, the Ministry of Finance and other four ministries and commissions issued the "Notice on Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles", requiring that the subsidy standard for new energy vehicles in 2022 be reduced by 30% on the basis of 2021. Since 2019, the subsidy of the new energy industry has entered the third stage of development - the national subsidy has retreated sharply, battery companies have begun to seek a lower cost and better battery structure solution, and lithium iron phosphate has returned to the tide.
New energy industry companies have turned their attention to lower cost lithium iron phosphate materials, new energy giant Ningde era launched CTP batteries, BYD launched blade batteries, Guoxuan Hi-Tech launched JTM batteries, by optimizing the module structure to achieve the effect of improving energy density. Since the second half of 2020, bydir Han, Hongguang Mini EV, lithium iron version model 3 and other explosive models have been launched, driving the penetration rate of lithium iron phosphate batteries in new energy passenger cars.
With the gradual increase in the use of lithium iron phosphate, its main production material, iron phosphate, has also ushered in a huge development opportunity.
Iron phosphate is currently highly concentrated in the industry
According to Longzhong Information Monitoring, in 2021, China's annual output of iron phosphate is around 307,500 tons, of which the top six in the industry are Hunan Yuneng, Hunan Yacheng, Tongling Nayuan, Guizhou Kaiyang Anda, Hubei Wanrun, Jiujiang Tianci, the industry's top six total output in 2021 accounted for 72% of the national output, and other market competitors accounted for only 28% of the output in 2021.
The market share of the main competitors in China's iron phosphate market in 2021
The future production capacity of iron phosphate is huge
According to data released by the Ministry of Industry and Information Technology on January 12, China's new energy vehicle sales reached 3.521 million units in 2021, ranking first in the world for seven consecutive years. Lithium iron phosphate is facing a huge gap at the same time, iron phosphate is also facing a huge gap, major enterprises have seized the development opportunities of new energy, the new proposed capacity continues to emerge, according to Longzhong information, the current proposed and under construction capacity has reached 7 million tons, involving more than 40 enterprises.
Future industry concentration shifts
The enterprises to be built are expected to be gradually put into production in the next 5 years, the future production enterprises will reach more than 60, the industry concentration will shift from the concentration of leading enterprises to the concentration of regions, and the future production capacity will be mainly concentrated in the southwest region where phosphate ore and titanium ore resources are abundant, relying on raw material advantages. Central China is mainly dominated by Hubei, and the production capacity in East China will also be among the best.