The dust on the production and sales of new energy vehicles in 2023 has settled.

According to data from the China Association of Automobile Manufacturers, in December, the production and sales of new energy vehicles reached 1.172 million and 1.191 million, respectively, with a year-on-year increase of 47.5% and 46.4%, and a market share of 37.7%; In 2023, the cumulative production and sales of 9.587 million and 9.495 million vehicles were completed, with year-on-year growth of 35.8% and 37.9% respectively. The market share reached 31.6%, 5.9 percentage points higher than the same period last year.

Overall, the sales performance of the new energy vehicle market for the whole year of 2023 was low opening and high rising, maintaining a stable growth trend in the second half of the year.

Especially in December, major brands launched a new round of price reductions, with discounts ranging from 10000 to 50000 yuan for some models such as Ideal, NIO, Nezha, and Jike. BYD's entire lineup saw price reductions ranging from a few thousand yuan to tens of thousands of yuan. A wave of promotional measures before the end of the year has driven sales growth of nearly 50% year-on-year for the current month, marking a "small tail" for the 2023 new energy vehicle market.

Looking back at 2023, the price war at the beginning of the year caused a sharp decline in the prosperity of the new energy vehicle market, and the entire industry paid a painful price for cost reduction and efficiency improvement.

From the perspective of electrification penetration, new energy vehicles in China have maintained a stable market share of over 30% since April 2023. The industry has transitioned from a period of high-speed growth to a mature period, and fierce competition has become the main theme of the industry.

The High Tech Industry Research Institute (GGII) believes that in order to approach the goal of "oil and electricity at the same price", the new energy vehicle market will continue the main tone of price war in 2024.

The more intense competitive pressure is also being transmitted to the power battery industry chain.

The overall synchronization of the power battery industry chain in 2023 has gone through industry changes, including a destocking of energy vehicle terminals in the first quarter, a turning point in the second quarter, and recovery and growth in the third and fourth quarters. During the process, the competition pattern in various fields of the power battery industry chain is accelerating towards polarization.

On the battery side, preliminary research data from GGII shows that in 2023, China's power battery shipments reached 630GWh, a year-on-year increase of 31%. In terms of price, the overall price and profit of battery cells are showing a downward trend, and GGII expects to recover after 2025.

On the material side, the current production capacity planning of segmented industrial chains such as positive electrode materials, negative electrode materials, separators, and electrolytes far exceeds the demand limit of the market in 2025. In addition, some enterprises have accelerated the speed of capacity investment and upgrading in order to promote the ability to reduce costs on a larger scale, leading to an earlier timeline for overcapacity.

On the equipment side, the production line is increasing efforts to introduce new processes represented by efficiency improvement, and promoting quality and efficiency improvement through process transformation.

Under the continuous competitive situation, the evolution process from old production capacity to new production capacity in the industrial chain is accelerating. Enterprises should pay attention to opening up sources and reducing costs, consolidate their high-quality channels, create differentiated advantages, and maintain a healthy cost reduction to achieve a cycle crossing.