Launched by the Zhongtong Financial APP, GTJA Securities released a research report stating that the current new energy vehicle industry chain is at the bottom of the cycle, with the peak season of new energy vehicles overlapping with energy storage that is stronger than expected, leading to an improvement in lithium battery demand. With the implementation of the European carbon emission plan in 2025 and the potential for US energy storage 'grabbing' of lithium batteries, mid-term demand is expected to continue to drive growth. It is recommended to actively focus on: 1) leading lithium battery companies with strong performance; 2) oversold leaders in the lithium battery sector; 3) consumer battery segments benefiting from the recovery of downstream consumer electronics and AI innovation cycles; 4) in terms of industry trends, traditional vehicles achieving volume and price increases in the new energy sector through electrification and brand upgrades, benefiting the supporting industry chain; 5) in terms of new technologies, the industrialization process of solid-state batteries is accelerating; the industrial chain supported by Tesla's (TSLA.US) Cybertruck gradually increasing production of the 4680 battery.

The main points of view of gtja Securities are as follows:

In September, China's new energy vehicle sales maintained high growth, with a slight recovery in Europe and a poor performance in the USA. In September 2024, China's new energy vehicle sales reached 1.287 million units, a year-on-year increase of 42.3%, a month-on-month increase of 17.0%, and a penetration rate of 45.8%; new energy vehicle exports reached 0.111 million units, a year-on-year increase of 15.6%, a month-on-month increase of 0.9%; from January to September 2024, China's new energy vehicle sales reached 8.32 million units, a year-on-year increase of 32.5%. In September, the combined sales of new energy passenger vehicles in seven European countries reached 0.222 million units, a year-on-year increase of 9.0%, a month-on-month increase of 13.0%, with a penetration rate of 25.9%; from January to September 2024, the combined sales of new energy passenger vehicles in seven European countries reached 1.496 million units, a year-on-year decrease of 4.4%. In September, the sales of new energy passenger vehicles in the USA reached 0.123 million units, a year-on-year decrease of 6.5%, a month-on-month decrease of 19.1%, with a penetration rate of 10.5%; from January to September 2024, the sales of new energy passenger vehicles in the USA reached 1.127 million units, a year-on-year increase of 9%.

The global power market continues to experience high growth in installations. According to SNE data, in August 2024, global power battery installations reached 69.8GWh, a 19.0% year-on-year increase. Among them, Chinese companies accounted for over half of the top ten, with Contemporary Amperex Technology in a leading position. Domestically, in September, China's power battery installations reached 54.5GWh, a year-on-year increase of 49.7%, a month-on-month increase of 15.5%. Among them, ternary battery installations reached 13.1GWh, accounting for 24.1% of total installations, a year-on-year increase of 7.4%, a month-on-month increase of 8.2%; lithium iron phosphate battery installations reached 41.3GWh, accounting for 75.8% of total installations, a year-on-year increase of 70.9%, a month-on-month increase of 18%. In terms of enterprise installations, in September 2024, Contemporary Amperex Technology's installations reached 249GWh, a 14.4% month-on-month increase, with a market share of 44.0%, while Byd Company Limited (002594.SZ) and Zhongchuang Hong's market shares were 24.2% and 6.7% respectively, ranking second and third.

Global sales are expected to exceed 17 million units in 2024. Domestically, with economic recovery and stimulus from the policy of replacing old vehicles with new ones in 2024, new energy vehicles are expected to become a focal point for recovery, with new models further penetrating lower price bands. Overseas, the growth of the European and American new energy vehicle markets has slowed down due to subsidy reductions and insufficient supply of new models, but there is still significant room for penetration.

Risk Warning: Staged overcapacity affecting profits, economic recovery falling short of expectations.