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China xEV Battery Value Chain Electrolyte: The Golden Age of Chinese Electrolyte Suppliers

Chinese electrolyte players could reach 87% of global market share by 2025 (vs 69% in 2020), based on our estimate.

We believe a combination of three macro factors creates a golden opportunity for Chinese electrolyte players to increase their global footprint:

  1. Fast response to accelerated demand with ambitious capacity expansion
  2. Cost advantage from localisation of supply chain
  3. Partnerships with global leading Li-ion battery makers

Positioning in the value chain is key to a winning strategy. We estimate solute LiPF6 and solvent prices, as well as electrolyte prices, will remain high for some time. As new capacities come online, LiPF6 electrolyte and solvent prices could retreat from current elevated levels. We prefer leading electrolyte players with vertical integrated supply chains, as they can benefit from long-term demand growth and from near-term price increases, while their cost advantage from vertical integration also enables them to be more defensive in a price downcycle.

@Horace Tse