In September 2024, according to the latest data released by the China Automobile Dealers Association, retail sales of new energy passenger vehicles once again exceeded one million units, reaching 1.123 million, a year-on-year increase of 50.9%, and a market penetration rate of 53.3%. Most notably, the retail penetration rate of new energy vehicles has exceeded 50% for three consecutive months. Since the beginning of the year, the new energy vehicle market has also performed remarkably well, with cumulative retail sales reaching 7.132 million units, a year-on-year increase of 37.4%. Driven by this new energy wave, the upstream lithium battery materials market has also ushered in unprecedented development opportunities.
In recent years, Fushine Pharmaceuticals has leveraged its years of experience in the pharmaceutical industry and its quality management advantages, and combined with market demand, has actively developed new energy lithium battery electrolyte additives business. Its main products currently include vinylene carbonate (VC) and fluoroethylene carbonate (FEC), which are widely used in lithium-ion power batteries, energy storage batteries, consumer batteries and other fields.

Catch up and continuously increase market share

In 2021, the company has rich experience in chemical reactions such as halogenation, material separation, product purification and other process links involved in electrolyte additive products. In combination with market demand, it invested in the construction of VC and FEC product projects in its subsidiaries.

The company currently has an annual production capacity of 8,000 tons of VC products and 1,000 tons of FEC products. With the rapid growth in demand for new energy lithium batteries, the company plans to increase its VC and FEC production capacities to 20,000 tons and 5,000 tons respectively.

VC production workshops with an annual output of 8,000 tons (left) and 12,000 tons (right)

As production capacity for products like VC is gradually released and product shipments continue to grow, the company's additive business revenue will increase from 147 million yuan in 2022 to 275 million yuan in 2023, a year-on-year increase of 87%. Additive shipments will also increase from 1,740 tons in 2022 to 5,081 tons in 2023, a year-on-year increase of 192%. According to statistics, the company's VC product shipments in 2023 will already be among the highest in the industry.

According to Dadong Times Zhiyan Consulting data, in terms of lithium battery electrolyte additives VC, in the first quarter of 2024, Genyuan New Materials, Huasheng Lithium Battery and Fushine Pharmaceuticals ranked the top three in the industry in terms of shipments respectively.

Patents guide the way, playing the "March of Innovation"

Adhering to a development philosophy driven by innovation and prioritized quality, the company continues to break through technological barriers. In April 2024, its subsidiary, Fushine Technology, received EU REACH certification, authorizing the free sale of its VC products within the EU. It also passed the IATF16949 international automotive quality management system certification, successfully securing a "passport" to the automotive supply sector. In June, Fushine Technology successfully obtained a patent for a "method for synthesizing vinyl carbonate (VC)." With the continued promotion and in-depth application of its patented technology, Fushine Technology is gradually establishing a new development model driven by innovation, steadily progressing toward its production goals of higher quality and greater efficiency.

VC and FEC are the amounts used in the electrolyte
The largest additive
The upstream of the new energy lithium battery electrolyte industry chain is chemical raw materials such as solutes, solvents, and additives; the midstream is electrolyte preparation, and different proportions and additives are used to make the electrolyte have different characteristics and functions; the downstream is the battery field, including power batteries, energy storage batteries, consumer batteries, etc.

VC and FEC are the two most widely used additives in electrolytes due to their mature process, clear and reliable film-forming performance, and moderate price.

VC is a core film-forming aid in lithium battery electrolytes. It is a core additive in lithium battery electrolytes. It can undergo electrochemical reactions on the negative electrode surface during the initial discharge of the lithium battery to form a solid electrolyte interface film (SEI film). It can effectively inhibit the embedding of solvent molecules, thereby avoiding initiating chemical reactions of electrode material solvents and causing degradation of battery cycle performance.

FEC is a core additive developed specifically for electrolytes of high-rate power lithium-ion batteries. It is the main guarantee for achieving high safety and high rate of lithium batteries, and can enhance the stability of electrode materials.

The market is growing rapidly.
Driving demand for upstream electrolyte additives

According to data from the China Automotive Power Battery Industry Innovation Alliance and the China Business Industry Research Institute, from January to June 2024, my country's cumulative power battery sales reached 318.1GWh, a year-on-year increase of 26.6%. According to research statistics from the Gaogong Industry Research Institute (GGII), China's energy storage lithium battery shipments reached 116GWh in the first half of 2024, a year-on-year increase of 41%, and annual energy storage lithium battery shipments are expected to exceed 240GWh in 2024. Although the electrolyte additive industry is currently facing fierce competition due to the influx of participants and capital, the continued growth of shipments in downstream areas such as power batteries and energy storage batteries will drive long-term market demand for upstream electrolyte additives.

Create a one-stop supply platform for electrolyte raw materials,
Boost the company's performance growth

Recently, the journal Party Building Research published an article signed by the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council, emphasizing the need to accelerate the development of strategic emerging industries and future industries. The article emphasizes the in-depth implementation of the Industrial Renewal Action Plan and the Future Industry Launch Action Plan, strengthening collaboration among enterprises of all ownership types across the industrial chain, and vigorously developing strategic emerging industries with high technological content and significant driving forces, such as integrated circuits, artificial intelligence, biotechnology, new energy, new energy vehicles, and new materials.
The company actively integrates its own development into the country's future industrial track, makes horizontal and vertical layouts of the lithium battery electrolyte industry chain, and is committed to building a one-stop supply platform for lithium battery electrolyte raw materials.On the one hand, the company is continuously expanding its electrolyte additive portfolio, now establishing a product chain spanning EC-CEC-VC/FEC and a recycling system for related by-products. On the other hand, the company is also expanding its electrolyte solute products. Based on the high conductivity, chemical stability, and thermal stability of lithium bis(fluorosulfonyl)imide, the company plans to invest in a project with an annual production capacity of 20,000 tons of sulfuryl fluoride and 10,000 tons of lithium bis(fluorosulfonyl)imide, in line with the future development of high-performance, wide-temperature, and highly safe lithium batteries.

Currently, the company continues to optimize process flows, improve production cycle systems, and enhance technology to continuously reduce production costs for products such as VC and steadily enhance the market competitiveness of its products. We firmly believe that through the unremitting efforts of all Fushine employees, the lithium battery electrolyte additive business will provide a strong driving force for the company's future performance growth.