In the past month battery prices have kept rising, but people have found that the increase is not uniform: prices in some places have even fallen. A general price rise should have been the best chance to make money. Everyone wants profit, so why do some merchants give it up?

1. Small No-Name Battery Factories Rising from the Ashes

The price increase raised profit margins across the industry. But when market prices are generally high, low prices become attractive, giving small no-name factories room to survive. Although this year saw four rounds of thorough environmental inspections, they were concentrated in key cities and industrial zones, and remote areas were not covered. Spotting an opportunity, some small no-name factories moved to mountainous and hilly areas in Jiangxi, Hunan, Fujian and Guangdong to produce in secret.

A reporter conducted an undercover visit to a secret battery workshop on a flat piece of land by a mountain and a river in a county of Hunan. The gate was tightly shut; unless you looked carefully you would not know that a whole crew was producing inside. The gate would only open to those who gave the right password. After exchanging the password and entering, the reporter saw endless plastic shells of lead-acid batteries and the pungent smell of sulfuric acid drifting through the rooms. A dozen workers wearing masks, caps, plastic aprons, sleeves and rubber shoes were busy working briskly. The factory had no environmental facilities, discharging wastewater and waste gas at will. Because it was remote with no residents nearby, it was extremely hard to detect. It is said that this underground battery factory belongs to a boss from Zhejiang and is rented for 150,000 yuan a year.

Where there is profit, people will come. Once battery prices rise and money can be made, such no-name factories that relocate and rise from the ashes will only increase, and more and more inferior low-price batteries will flow into the market.

2. Second-Tier Brands in Difficulty Forced to Sell at Low Prices

A general price rise does not benefit every battery manufacturer. First-tier brands and small brands each hold advantages in quality and price. Second-tier brands fall short of the top yet barely beat the bottom, facing heavy operating pressure, weak absorption capacity and large inventory. A price war is the fastest way to clear stock.

3. Brand Hype to Grab Market Share

Besides clearing stock quickly, a price war is also a simple and direct way to seize the market. To grab market share, some manufacturers are willing to break the industry price floor, take the blame of the whole industry and stake everything on a big price war. This is also why former industry leaders once fought price wars and sold at a loss for a long time.

Therefore, when choosing an electric vehicle battery, do not be attracted by low prices alone. Choose batteries from big brands with good quality.