Domestic Electrification Penetration Stalls at 54% While Battery Exports Surge Over 58%

July 2025, ChinaNew energy vehiclesThe "dual phenomenon" of slowing domestic growth alongside strong export expansion is profoundly transmitting upward, reshaping...Power batteryThe competitive logic and growth path of the industry.

For battery companies, the competition over the existing domestic market and the growth opportunities in overseas markets have become two battlegrounds that must be addressed simultaneously.

The domestic car market is cooling down.

The most direct pressure comes from the overall cooling of the domestic market. In July, the production of new energy passenger vehicles was approximately 1.15 million units, representing a year-on-year increase of 22%, but a month-on-month decrease of 3%. The retail sales in the market were about 990,000 units, an increase of 12% year-on-year, but a significant month-on-month decline of 11%. As a result, the overall inventory of new energy vehicles decreased by about 60,000 units.

A key signal is that, since surpassing 50% in the past year, the monthly domestic new energy vehicle retail penetration rate has been hovering between 50% and 54%, and has yet to break through the 55% threshold.

More noteworthy than the overall decline is the structural shift in the market. In July, the retail sales of pure electric vehicles grew by approximately 25% year-on-year, remaining strong. However, sales of plug-in hybrid vehicles fell by 0.2% year-on-year, while range-extended vehicles saw a significant year-on-year drop of 11%.

This relative shift has already directly reshaped the internal structure of new energy vehicle companies, with the sales proportion of pure electric and extended-range models reversing from last year's 43% to 57% to this year's 64% to 36%.

Furthermore, the rise and fall of terminal brands are reshaping the customer landscape of battery manufacturers. In July, the retail market share of domestic new energy vehicle brands stabilized at 70%, with a new energy penetration rate as high as 75%. In contrast, the penetration rate for luxury cars was 30%, and mainstream joint venture brands only accounted for 7%. Among them, the market share of "new forces" driven by companies like Xpeng, Leapmotor, and Xiaomi increased to 21%, an increase of 2 percentage points year-on-year.

In contrast, Tesla's market share dropped to 4% (a year-on-year decrease of 1.1 percentage points), and the market share of mainstream joint venture brands fell to less than 4% (a year-on-year decrease of 0.6 percentage points). The depth of binding between battery manufacturers and different car companies directly determines their current order trends. For example, in July, LG had already fallen out of the top 10 ranking for power battery installations.

At the same time, the price war is actually still ongoing and is precisely transmitting cost pressure to the battery side. In July, the average price reduction for new energy vehicles was 17,000 yuan, with a reduction rate of 11.1%, which has eased but is still at a medium-high level.

In the fiercely competitive plug-in hybrid sector, the average price of discounted models is approximately 210,000 yuan, with a significant price reduction of 33,000 yuan, representing a discount rate of 14%, which is higher than that of pure electric vehicles during the same period. Meanwhile, the promotion coefficient has increased by more than 4 percentage points year-on-year. The promotional efforts for range-extended models have also increased by over 3 percentage points compared to the previous year.

The anti-involution of new energy vehicles cannot be achieved overnight, as automakers continue to impose stricter cost requirements on upstream battery suppliers.

This is reflected in the data: In July, lithium iron phosphate (LFP) batteries accounted for as much as 81% of domestic power battery installations, with installation volume increasing by 49% year-on-year; meanwhile, ternary batteries saw a 4% year-on-year decline in installations, indicating that domestic market demand is clearly under pressure.

Meanwhile, the concentration of the domestic power battery market continues to decline, with the market share of the top two companies decreasing by 4.5 percentage points year-on-year from January to July. In order to control costs, car manufacturers are actively seeking more diverse and cost-effective battery suppliers. The rapid growth of second-tier manufacturers such as Gotion High-Tech (an increase of over 100% in July) and GY Power (the fastest growth among the top 10) is a reflection of this trend.

Globalization and high-end development progress together, becoming a new growth pole.

During the period of "involution" in the domestic market, export business has become a crucial growth engine for the entire industry chain. This growth consists of two levels: one is the "indirect export" carried by Chinese complete vehicles, and the other is the direct overseas export of battery products.

In July, the export of new energy passenger vehicles reached 210,000 units, a year-on-year increase of 120% and a month-on-month increase of 8%. This accounted for 45% of the total passenger vehicle exports, marking an increase of nearly 20 percentage points compared to the same period last year.

Among them, pure electric vehicles account for 65% of new energy exports, and as a core focus, A00+A0 class small pure electric vehicles have seen their share in pure electric vehicle exports surge from 26% last year to 43%. This has directly driven overseas demand for cost-effective lithium iron phosphate batteries.

At the same time, exports of plug-in hybrid models have surged more than twofold year-on-year, bringing new growth opportunities for battery manufacturers.

At the enterprise level, BYD's automobile exports reached 80,000 units in July, a year-on-year increase of 160%. Its performance in the European market was particularly outstanding, with sales increasing 4.7 times year-on-year and market share rising by more than 1 percentage point. This strong momentum in complete vehicle exports perfectly resonates with its battery business.

In July, BYD's battery exports, primarily for power, increased by nearly 97% year-on-year, far surpassing the modest 10% growth of its domestic vehicle installation business. This indicates that its "car + battery" strategic focus is shifting towards the global market, showing the synergistic effects of its overseas strategy.

In July, the overall battery exports saw a year-on-year increase of over 48%, surpassing domestic sales, which grew by approximately 46% year-on-year.

Structurally, China's export volume of ternary lithium batteries is 8.4 GWh, accounting for approximately 57% of the total exports, with a year-on-year growth of about 33%. The export volume of lithium iron phosphate batteries is 6.2 GWh, accounting for about 42%, with a year-on-year growth rate as high as 76%. This indicates that while the current high-end overseas market still prefers ternary batteries, the global acceptance of lithium iron phosphate batteries is rapidly increasing.

Ruipu Lanjun and Honeycomb Energy have also been making great strides in the overseas market. From January to July, their exports of power and energy storage batteries achieved year-on-year growth of 206% and 170%, respectively, representing a doubling in scale.

Ruipu Lanjun's export growth rate has exceeded 100% for two consecutive months; meanwhile, Honeycomb Energy, leveraging its layout in ternary batteries, has successfully supplied international automakers such as Vietnam's VinFast and Europe's Stellantis, achieving counter-trend growth in scale and market share.

It is worth noting that while there is a price war in the mid- to low-end market, the high-end market above 250,000 yuan is becoming the new battleground. Since June and July, automakers such as Li Auto, Audi, AITO, and Xiaomi have been frequently launching new mid- to high-end vehicles priced above 250,000 yuan.

Additional data indicates that models represented by Huawei's HarmonyOS intelligent driving have surpassed BBA (below 340,000 yuan) in both sales volume and average transaction price (approximately 390,000 yuan). This suggests that the market demand for high-performance batteries with high energy density and long range remains strong.

The global output of ternary materials reached a record high in July, further confirming this trend. For Chinese battery companies, this means they cannot afford to relax their investment in R&D for high-performance battery technologies.

Looking ahead, it is worth noting that as automobile consumption subsidies shift from direct grants to loan interest subsidies, policy signals are undergoing a transformation. The core of anti-involution will gradually move away from mere product consumption to service consumption areas, including battery testing, aftermarket maintenance, and battery swapping.

For car manufacturers, when some hybrid models begin to contract in the domestic market, how to continue expanding the replacement advantage over the fuel vehicle market, rather than engaging in stock competition with pure electric vehicles, will be a question that must be answered.