Major Changes In The Global New Energy Industry!
Note that the global new energy industry is likely to undergo a major change. Not long ago, the European Union passed another major bill called the Net Zero Industrial Act.
This bill aims to improve Europe's manufacturing capacity for net zero technology and its key components and address barriers to expanding European production. The bill will increase the competitiveness of the net zero technology sector, attract investment, and improve market access for clean technologies in the EU. This supports clean energy transformation and improves the EU's energy resilience.
It is particularly noteworthy that this bill clearly states that by 2030, 40% of the EU's new energy equipment will be manufactured locally in Europe, including photovoltaic modules, wind turbines, energy storage batteries, heat pumps, and green hydrogen production equipment.
If you are engaged in the new energy industry, you will probably be a little nervous when you see this, because China currently has an absolute advantage in the manufacturing of new energy products around the world.
In terms of photovoltaics, the production capacity and output of battery cell modules account for more than 80% of the world, while wind turbines account for 60% and lithium batteries account for 80%. Moreover, a large part of China's new energy product exports flow to Europe. Will the EU's introduction of the Net Zero Industrial Act change this pattern? What impact will it have on China's new energy industry?
First of all, from the perspective of development trends, the global reshaping of the new energy industry will be an inevitable trend. Why do I say that? The key is that the energy industry is the foundation of all other industries in society. We call it the root industry. Low carbon and energy transformation are crucial for any country and region.
Therefore, in the long run, no country will be willing to let new energy products come entirely from imports, especially countries with relatively high new energy consumption. They will definitely find ways to keep it in their home countries at certain key links in the energy industry chain.
The 2022 US Inflation Reduction Act is for this purpose, and the current EU Net Zero Industrial Act is also for this purpose. In fact, in order to cope with such a trend, many new energy companies in China have already started to act. You will find that in the past two years, there are many new energy companies in China that have invested in and built factories abroad. Many photovoltaic battery companies have built factories in the United States and Europe, and this trend is still expanding.
However, the challenges faced by Chinese new energy companies are far more than just building factories overseas. In the past decade, China's new energy industry has led the world with its first-mover advantage, but with the acceleration of localization in Europe and the United States, the next step will be unprecedented fierce competition.
Just because we have an advantage now, you must not underestimate relatively backward competitors. On May 18, 2024, the US photovoltaic module company First Solar surpassed China's Suntech Power Supply and became the world's largest photovoltaic company by market value.
Of course, there are some reasons behind the US government's energy policy, but from this you will find that European and American photovoltaic manufacturers may not be as simple as you think.