I. From Rapid Expansion to Structural Divergence

Between 2020 and 2023, China's power battery industry went through an extraordinary capacity build-up. Policy subsidies, an explosion in new energy vehicle sales, and large-scale capital inflows drove every province to compete for battery projects, with total committed investment running into the trillions of yuan. By the end of 2023, China's annual power battery capacity had exceeded 1,500 GWh, while domestic battery installations for the year totalled 387.7 GWh — a gap of several multiples between nameplate capacity and actual absorption.

This report addresses three questions: how China's power battery capacity is distributed geographically, how the competitive landscape among leading enterprises has evolved, and what the structural character of declining capacity utilization actually means for the industry.

II. Regional Capacity Structure: Four Core Hubs and a Dispersed Second Tier

China's power battery capacity is far from evenly spread. Measured by installed production scale, Fujian, Jiangsu, Sichuan, and Guangdong form the first tier; Hubei, Chongqing, and Shaanxi follow in the second; the remaining provinces hold comparatively limited capacity. This geography reflects both historical path dependence and each region's resource endowments and industrial policies.

Fujian: Single-Hub Concentration Driven by CATL's Headquarters

Fujian's power battery capacity is tightly concentrated, and the logic is straightforward: CATL is headquartered in Ningde, and its flagship production centers in Hudong, Huxi, and Fuding are all within the province. By 2023, Fujian's installed power battery capacity was approximately 140 GWh, with CALB (CATL Advanced Manufacturing and Technology) also establishing a first-phase plant in Xiamen. Fujian's model is one of high concentration around a single champion; its capacity ceiling is essentially the pace at which CATL chooses to expand.

Jiangsu: The Most Complete Industrial Chain Among All Provinces

Jiangsu's advantage lies not just in scale but in the completeness of its supply chain ecosystem. Liyang hosts multiple CATL production lines; Changzhou is home to CALB's first and second phases and SVOLT Energy Technology's Jintan base; Nanjing holds several Gotion High-Tech factories. LG Energy Solution's Nanjing plant and SK Innovation's Changzhou plant add a significant foreign presence. Across cathode materials, anode materials, separators, and electrolytes, Jiangsu has accumulated one of the most self-sufficient upstream supplier networks in China, making it the province with the strongest overall industrial-chain competitiveness.

Sichuan: A Resource-Driven Late Mover That Has Reached the First Tier

Sichuan's rise in power batteries is grounded in natural advantages: lithium-rich geology around Yibin and Suining, low electricity costs from hydropower, and generous local government support on land and tax. Yibin, anchored by Sichuan Times (a CATL subsidiary), has attracted CATL, EVE Energy, SVOLT, CALB, and Sunwoda in rapid succession. The industrial chain extends upstream to lithium mining, basic lithium salts, and electrode materials, and downstream to cell manufacturing. In less than a decade, Sichuan transformed from a peripheral producer into a genuine first-tier hub — a textbook case of government-led industrial attraction.

Guangdong: Multi-Player Coexistence with BYD as the Anchor

Guangdong's capacity structure is distinctive. BYD's plants in Huizhou and Shenzhen Kengzi are the dominant contributors, with CATL's GAC Times joint venture, EVE Energy's Huizhou campus, and Sunwoda's Huizhou lines running alongside. BYD's battery production is deeply integrated with its own vehicle manufacturing, limiting its external supply volumes. Guangdong's additional strength lies in the dense electronics manufacturing ecosystem in Shenzhen, Dongguan, and Huizhou, which provides strong support for consumer batteries and energy storage as well.

Other Provinces: Dispersed Presence with Clear Stratification

Hubei hosts EVE Energy's multi-phase Jingmen base and CATL's Dongfeng Times plant, with installed capacity exceeding 20 GWh and additional projects under construction. Chongqing's output comes primarily from BYD's Bishan base. Shaanxi holds a BYD plant in Xi'an alongside Samsung SDI's Xi'an facility. Qinghai has drawn in CATL and BYD projects leveraging its lithium salt resources. Hunan, Hebei, Anhui, and Zhejiang each operate between 10 and 15 GWh of installed capacity, largely from branch facilities of the leading enterprises.

III. Enterprise Landscape: Dual-Oligopoly Dominance, Accelerating Tier Divergence

The enterprise structure of China's power battery market is one of the most concentrated in any major manufacturing industry.

CATL is the world's largest power battery manufacturer by every measure. In 2023, its domestic installations reached 167.1 GWh with a 43.11% domestic market share. In 2024, domestic installations rose to 256.01 GWh and domestic share to 45.08%. Globally, CATL's 2024 EV battery installations totalled 339.3 GWh, accounting for a 37.9% global market share according to SNE Research — placing it first globally for multiple consecutive years. Its production network spans Fujian, Jiangsu, Guangdong, Sichuan, Hubei, Qinghai, Guizhou, Germany, and Hungary.

BYD is the second-largest producer, but its model is fundamentally different: BYD's battery capacity is primarily captive, supplying its own electric vehicles across passenger and commercial segments, with limited external supply. Domestic installations were 105.48 GWh in 2023 (27.21% share) and 135.02 GWh in 2024 (24.74% share). BYD's plant network tracks its vehicle factories — Chongqing, Shaanxi, Guangdong, Hunan, Anhui, Qinghai, and Guizhou all host BYD battery production.

CALB (China Aviation Lithium Battery) is the fastest-growing company in the second tier, with a 2024 domestic market share of approximately 6.68%. Its plants in Changzhou, Xiamen, Hefei, Wuhan, and Luoyang make it the most broadly deployed external supplier after CATL and BYD, and one with the widest range of automaker customers.

The broader second tier includes EVE Energy (Jingmen, Hubei, as its core), Gotion High-Tech (Hefei-centered, Volkswagen-backed), SVOLT Energy Technology (Great Wall Motor affiliate, Jintan and Jingmen bases), and Sunwoda (Shenzhen and Huizhou). Their individual installation volumes range from single digits to over 20 GWh.

From a global perspective, SNE Research data for 2024 shows Chinese enterprises holding six of the top-ten positions in global EV battery installations. CATL, BYD, CALB, EVE Energy, Gotion, and Sunwoda all rank in the global top ten. Korean and Japanese manufacturers have seen their combined market share erode materially — a shift that reinforces the structural position Chinese producers have built in the global supply chain.

IV. Capacity Utilization: The Structural Nature of the Overhang

Capacity utilization is the single most important metric for understanding the tension in China's power battery industry today. According to data from the China Automotive Battery Innovation Alliance and related industry bodies, China's power battery capacity utilization rate stood at approximately 52% in 2022, then fell to around 40% in 2023 as a wave of new capacity came online while demand growth decelerated. Some research projections suggest the rate could fall below 35% by 2025 without significant adjustments to expansion plans.

The supply-demand imbalance is visible in production data. In the first half of 2023, battery installations in vehicles accounted for only 51.8% of production output — meaning nearly half of all batteries produced were not immediately absorbed as vehicle installations, requiring export, energy storage deployment, or inventory accumulation. By 2024, total production capacity had surpassed 2,000 GWh, while global combined demand for power and storage batteries remained well below that threshold.

It is essential to note that this overcapacity is structural, not uniform. The surplus is concentrated in low-end lithium iron phosphate cells, outdated technical platforms, and smaller second-tier producers. CATL's premium cells and new battery products — such as its condensed matter battery and next-generation cell designs — continue to face tight supply and extended lead times. In this sense, falling utilization rates are an industry consolidation signal, not evidence that the sector has lost its growth trajectory. Sustained price competition is accelerating the exit of marginal producers; merger activity and capacity write-offs are already under way.

V. Exports and Overseas Manufacturing: Absorbing Surplus Through Globalization

Export has become a meaningful release valve for overcapacity pressure. In 2023, China's power battery exports totalled 127.4 GWh, up 87.1% year-on-year, with lithium iron phosphate cells seeing particularly strong overseas demand. In the first eleven months of 2024, cumulative exports were 115.8 GWh — year-on-year growth had moderated from the prior-year surge, but from a much higher base.

CATL's overseas strategy illustrates the broader shift from exporting cells to building local manufacturing. Its German plant, operational since 2022, has around 14 GWh of annual capacity. Its Hungarian plant, with a planned 100 GWh capacity, has completed civil construction and is progressing through equipment installation. A third European facility in Spain was signed in late 2024. BYD, EVE Energy, and Sunwoda have similarly established or announced production in Hungary, Malaysia, and Indonesia.

The EU's Battery Regulation and carbon tariff policies are creating structural pressure on Chinese producers to localize European supply chains. The overseas expansion is not simply a strategy for capacity relief; it is a deliberate positioning move for the global electrification transition.

VI. The Upstream Sales Opportunity

For upstream suppliers serving the power battery industry — cathode materials (LFP, ternary), anode materials (artificial graphite, silicon-carbon), electrolytes, separators, structural components, formation and grading equipment, welding systems, and testing instruments — this wave of capacity expansion has created an enormous and geographically dispersed customer base.

The challenge for upstream sales teams is identifying, within this broad network of factories spanning Fujian, Jiangsu, Sichuan, Guangdong, and increasingly overseas, which battery manufacturers have active procurement needs, who the relevant decision-makers are, and how to reach them at scale. At Tianxia Gongchang, upstream suppliers can filter the full national directory of battery manufacturing factories by industry, locate decision-maker contact details in batch, and convert customer development from ad-hoc referrals into systematic outreach.

VII. Research Institute Assessment

The narrative of power battery overcapacity has been a fixture of Chinese financial media since 2023, but the divergence beneath the headline number is more consequential than the number itself. CATL continued to grow global installed volumes through the utilization downturn by maintaining technical leadership and client lock-in in premium segments. Smaller producers are bleeding cash in the price war, and their go-forward prospects are significantly weaker.

For upstream materials and equipment companies, this consolidation does not necessarily mean demand contraction. As market share concentrates further toward leading producers who are simultaneously expanding capacity, demand for high-quality upstream inputs will follow. The critical strategic question for upstream suppliers is whether they can qualify within the supply chains of CATL, BYD, and CALB — companies whose procurement processes are exacting and whose qualification cycles are long. That question cannot be answered purely through product improvement; it also requires systematic customer development that begins with knowing precisely where these factories are and who in those organizations controls purchasing decisions.

Tianxia Gongchang Industry Research Institute's assessment: the regional and enterprise structure of China's power battery industry will undergo a qualitative convergence between 2024 and 2026. Total nameplate capacity may not shrink, but effective capacity will concentrate irreversibly toward the top tier, and regional competition will shift from racing to attract projects to deepening specialization within a smaller number of core clusters. Fujian, Jiangsu, and Sichuan will continue to anchor national production, but the competitive differentiation among them will evolve from capacity scale to supply chain depth and technology-tier positioning. Understanding this structure is a prerequisite for any upstream enterprise formulating a credible market strategy in the power battery space.

Data Sources

  • Tianxia Gongchang (battery manufacturing factory directory and industry data, https://www.tianxiagongchang.com)
  • China Automotive Battery Innovation Alliance: monthly power battery installation statistics for 2023 and 2024 (via OFweek Lithium Battery Network)
  • SNE Research: 2024 global EV battery installation rankings TOP10 (via Yicai and CnEVPost)
  • CATL 2024 Interim Report (publicly disclosed at catl.com)
  • Qianzhan Industry Research Institute: 2025 China Power Lithium Battery Industry Panoramic Atlas (qianzhan.com)
  • Yicai Global: China battery capacity utilization rate analysis
  • Sina Finance: 2024 China power battery capacity-to-installation ratio analysis
  • CRU Group: China's overcapacity — Will its battery industry consolidate? (crugroup.com)