1、EQUITY:TECHNOLOGYAsia EV batteriesGlobal Markets Research20 August 2025Riding the ESS upturn Policy surprises and competitive landscape change might provide upside/downside risks We see optimistic spots of investments despite EV supply chain restructuring Electric vehicle(EV)battery global demand gr

2、owth we forecast 11.2%/9.9%p.a.in 2025-30F/2025-35F is challenged by a weakened EV sales outlook due to the USs revoking of USD7,500 EV subsidy,removal of CAFE(Corporate Average Fuel Economy)penalties and Europes flexibility in CO2 emission standards(2025-27 average of 93.6g/km for cars;link).Howeve

3、r,we see a silver-lining in:1)battery price likely bottoming out as lithium price has risen 43%from the trough in June 2025,aided by Chinas lithium mine suspension(link;3%of global mining);2)European EV subsidies/credits increasing in an effort to progress toward carbon neutrality,despite a likely s

4、maller budget(from 2025F)than before;3)the USs strict regulations/subsidies for the usage of Chinese batteries and higher tariffs are likely to provide a level-playing field by providing opportunities for Korean players to expand market share(note that China had 16%/90%of US share in EV/ESS as of 20

5、24).ESS is a second growth engine ESS(energy storage system)battery demand is expected to grow 19%/12%p.a.in 2025-30F/2025-35F to 920GWh in 2030E(2024:307GWh;54%of 2030F EV application),driven by grid applications(78%of demand;renewables integration),with telecom/power outage backup applications rep

6、resenting 14%of demand and residential/commercial usage accounting for 8%,according to SNE Research.By region,the US/Europe/China should account for 25%/9%/54%(97/37/213GWh each)in 2025E.In our view,CATL(300750 CH,Buy)and LG Energy Solution(LGES;373220 KS,Buy)are the best-leveraged plays as CATLs ES