As we all know, lithium battery is a new type of green secondary battery successfully developed in the 1990s, which has been developing rapidly in the past decade or so, occupying the largest market share in the small secondary battery market and has become the most competitive battery in chemical power applications.
The total global auto sales declined in 2020 due to the epidemic, but the sales of electric vehicles grew against the wind, especially under the dual influence of tightening emission regulations and subsidy policies, the global new energy market completely exploded from the second half of 2020, and according to the global electric vehicle (passenger car) sales data published by EV Sales, against the background of a 14% year-on-year decline in global auto sales Global electric vehicle sales rose 41% against the trend in 2020, reaching 3.125 million units and a 4% market share.
In the context of the development of new energy vehicles, the global demand for lithium-ion batteries also accelerated the release - according to the prospectus data disclosure, the global lithium-ion battery market size of about $ 53.5 billion in 2020, an increase of 19% year-on-year, the growth rate increased by 10 percentage points compared to 2019, an accelerated growth trend.
The accelerated explosion of lithium battery demand also provides fertile ground for the development of lithium battery electrolyte industry. According to the relevant data, the market size of China's lithium battery electrolyte market increased from 6.121 billion yuan in 2016 to 7.710 billion yuan in 2019, and the market size of electrolyte is proportional to the output of lithium battery, and the increasing demand of lithium battery promotes the rising market size of electrolyte.
And benefiting from the rapid development of the lithium battery electrolyte industry, Huasheng Lithium's main products vinylidene carbonate (VC) and fluorosubstituted vinyl carbonate (FEC) have also become the company's main performance contribution point.
However, it should be noted that under the influence of a series of favorable new energy vehicle policies and strong demand for new energy vehicles, more and more lithium battery electrolyte-related companies have joined the "war", further intensifying the competition in the market.
Specifically, with the increasing market demand for electrolyte additives, there are new entrants in the electrolyte additives market with large scale of production expansion, and existing market players may increase their investment to expand their production scale and upgrade their technology, leading to increased competition in the industry in which the Company operates.
In addition, as the trend of industrialization of new additives deepens, the technical route of downstream battery manufacturers may change. Therefore, if the company's technology is not updated in a timely manner, the main products cannot meet the performance requirements of new batteries, or other suppliers develop new additives with better performance in new environments such as high voltage and high nickel, there is a risk that Huasheng Lithium's products may be replaced by other suppliers of similar products.
To sum up, for Huasheng Lithium, the accelerated explosion of lithium battery demand for its unprecedented development is undoubtedly enviable, but at the same time the competitive pressure it faces is not to be underestimated, and this is also or its breakthrough science and technology board to raise funds for expansion is a big reason. It is reported that the company's IPO to raise 700 million yuan, mainly invested in the annual output of 6000 tons of vinylidene carbonate, 3000 tons of fluorinated vinyl carbonate project and R & D center construction projects.
