In recent years, with the downstream demand, the profit situation is good and the profit margin is higher. The period from 2015 to 2018 was a golden growth period for automotive stop-start batteries in China, with a compound annual growth rate as high as 46%.

Lead acid battery segment market competition is fierce, scale advantage is the key. The domestic lead-acid battery market is more concentrated, chemical power lead-acid battery production industry competition is more fierce, product price competition and cost increase makes the main manufacturers in the industry net profit margin are greatly reduced. As residents' requirements for battery performance continue to rise, the state attaches increasing importance to environmental protection and the industry entry threshold continues to rise, enterprises with scale advantage in the industry will get more development opportunities, and can further expand their scale through production expansion and mergers and acquisitions, and the industry concentration will be improved.

Upstream high-end battery manufacturers have strong bargaining power. The upstream of lead-acid battery industry includes lead, sulfuric acid, plastics, etc. The lead-acid battery industry has a large demand for raw materials, and the lead and sulfuric acid industry as a whole presents excess capacity, and the battery manufacturing is an important downstream application field of lead, so the lead-acid battery industry has a strong bargaining power for lead and sulfuric acid. While plastic is in short supply, the battery industry has higher requirements on the characteristics of plastic, so the bargaining power of plastic industry is low. The upstream of lead-acid battery is mainly raw materials and other industries, affected by price fluctuations.

Upstream raw materials are affected by environmental protection policies, and their prices fluctuate greatly, which has a significant impact on the cost of the battery industry. Upstream for traders is the lead smelting industry, which has a greater impact on companies as lead and lead-calcium alloys account for most of the cost of lead-acid batteries. At present, there are many domestic lead smelting enterprises and the competition is fierce. With the increase of domestic environmental protection pressure and the improvement of product quality requirements, the living space of small and medium-sized smelting enterprises with backward technology will be further reduced, and the merger and reorganization will further increase the concentration of lead smelting industry. In order to reduce the impact of raw material price fluctuations on the profitability of the industry, enterprises will generally establish a linkage mechanism with customers on the product sales price of lead

The downstream demand drives industrial upgrading, the barriers of lead-acid battery industry appear, and the bargaining power of high-end batteries is strong. In recent years, with the downstream demand, the profit of lead acid battery industry is good, the profit rate keeps higher level, which has strong attraction for potential entrants. At the same time, the state issued a series of standardized industry policies, improve the industry entry threshold, industry barriers appear. Downstream industries are mainly automobiles, electric vehicles, communications, new energy, etc. At present, the bargaining power of lead-acid battery industry is generally low, but the bargaining power of high-end lead-acid battery products manufacturers is relatively high.

Car start - stop battery gross margin is high, high technical barriers. Start-stop batteries have higher requirements than ordinary starting batteries because they start more frequently and supply power to on-board appliances at idle. In 2018, the penetration rate of start-stop batteries will reach 50%, about 13.5 million sets; In 2020, the penetration rate will reach 70%, the shipment will be about 21 million, and the output value will be 14 billion yuan. The period from 2015 to 2018 was a golden growth period for automotive stop-start batteries in China, with a compound annual growth rate as high as 46%.