Rising Lightweight Electric Vehicle Sector Driven by Dual Carbon Strategy: Shanghai Yousheng Aluminum’s Technological Innovations Secure Industry Leadership

In the context of the global “dual carbon” strategy and the ongoing electrification of the automotive industry, the aluminum alloy automotive parts sector is experiencing significant growth opportunities. Shanghai Yousheng Aluminum Industry Co., Ltd. (hereafter referred to as “Yousheng”) has firmly established its leading position in the lightweight field of new energy vehicles through technological innovation, a comprehensive product portfolio, and a global presence.

In 2023, China’s sales of new energy vehicles exceeded 9.495 million units, achieving a penetration rate of over 30%. Lightweighting, a core approach to enhancing driving range, has directly contributed to the aluminum alloy parts market crossing the trillion yuan threshold. For instance, the use of battery trays in a single new energy vehicle amounts to 20-30 kilograms, with a unit price exceeding 4,000 yuan, creating a segmented market worth over 10 billion yuan. Yousheng has strategically positioned itself in this segment, with products such as threshold beams, battery trays, and bumpers widely utilized in popular models like the Tesla Model Y and the NIO ES series.

In 2023, the revenue from the company’s new energy vehicle parts accounted for 64.25% of its total sales, reflecting a year-on-year growth rate of 54.54%, significantly outpacing the industry average. This structural growth not only highlights the company’s strategic position within the supply chain but also demonstrates its keen insight into market demands.

Yousheng’s competitive edge stems from its substantial technological advancements. The company has independently developed aluminum alloys with a microstructure of fibers, achieving tensile strength between 391-396 MPa and yield strength between 362-369 MPa, both substantially exceeding industry standards. During collision energy absorption tests, this material can absorb energy equivalent to eight times its own weight, providing enhanced safety margins for new energy vehicles. This breakthrough not only addresses the challenge of balancing strength and ductility in aluminum alloys but also facilitates the application of its products in high-end vehicles.

Regarding its product matrix, Yousheng has achieved synergistic effects through differentiated layouts. Its threshold beam products capture over 60% of the market share for the Tesla Model Y, with sales reaching 27,265 tons in 2023, marking a 24.4% increase from the previous year. The battery tray business, which supports leading battery manufacturers like CATL and BYD, generated annual revenues of 666 million yuan with a gross margin of 23.36%. Additionally, the bumper series has become a core supplier for the Tesla Model 3/Y, with the proportion of assembly products rising to 59.98%. The subframe series is noted for its welding precision of ±0.1 mm and is used in high-end models from GAC Aion.

In 2023, the company’s sales volume of new energy vehicle parts reached 52,756 tons, reflecting a year-on-year growth of 22.9%. The scale effect contributed to a reduction in unit costs by 3.2 percentage points. On the customer expansion front, Yousheng has developed a supply chain system that covers new energy vehicle startups. The concentration of its top five customers reached 52.55% in 2023, with Tesla contributing 35.2% of total revenues. Notably, Tesla’s Shanghai factory produced 947,000 vehicles in 2023, with Yousheng’s supporting share exceeding 70%, ensuring business stability through strong ties with key customers.

Furthermore, by collaborating with CATL, Yousheng has entered the supply chain for Li Auto, achieving battery tray sales of 134 million yuan in 2023, a staggering year-on-year increase of 712%. This approach of being a “designated secondary supplier” for OEMs not only mitigates direct competition risks but also secures a continuous flow of orders.

Yousheng’s international expansion is also beginning to bear fruit. Its factory in Mexico commenced production in 2023, providing localized supply for Tesla’s North American orders, with overseas revenue now accounting for 2.74% of total sales. As construction progresses on its European production base, Yousheng is gradually establishing a global production capacity network to support its second growth curve.

From a financial perspective, Yousheng exhibits industry-leading profitability. In 2023, the gross margin reached 23.36%, surpassing the industry average of 18.7%, and the return on equity (ROE) stood at 23.13%. The increase in the proportion of high-value-added products (with assemblies accounting for 48.9%) and the realization of scale effects have driven the per capita output value to exceed 2 million yuan, 35% higher than the industry average. In terms of capital expenditure, the company invested 328 million yuan in the construction of bases in Yunnan and Chongqing in 2023. Once the fundraising projects reach full production, an additional capacity of 500,000 battery trays will be created, raising total capacity to 1.2 million units and expected to support a doubling of revenue over the next three years.

However, short-term cash flow pressures cannot be ignored. Operating cash flow for 2024 is projected at -253 million yuan, primarily due to increased prepayments for raw materials and extended customer payment terms. Although the debt-to-asset ratio of 52.98% is within manageable limits, the IPO fundraising of 1.27 billion yuan is necessary to alleviate financial strains.

While Yousheng demonstrates robust growth potential, certain industry risks must also be acknowledged. Firstly, fluctuations in raw material prices could impact gross margins by ±1.8 percentage points for every 5% change in aluminum prices. Secondly, the high customer concentration, with Tesla orders exceeding 30%, poses a dependency risk on a single client. Lastly, uncertainties in the internationalization process, particularly in ramping up capacity at the Mexican factory, may affect expectations.

Despite these challenges, the long-term development opportunities remain significant. The penetration rate of lightweighting is expected to continue rising, with the aluminum alloy parts market projected to reach 200 billion yuan by 2025, reflecting a compound annual growth rate of 25%. The application of new technologies such as integrated die casting and CTC battery chassis is likely to unlock new market opportunities. On the policy front, the “Automotive Lightweight Development Plan” clearly mandates that by 2030, the aluminum usage per vehicle should exceed 350 kg, providing a supportive framework for the industry.

In summary, Yousheng has established a considerable competitive advantage through its technological barriers, customer loyalty, and global layout. While facing short-term pressures from raw material costs and cash flow, its medium- to long-term growth trajectory is clear. According to comparable companies with a valuation of 25-30 times PE, combined with a projected net profit of 405 million yuan for 2024, a reasonable market value range would be between 10 billion and 12 billion yuan. Investors should closely monitor the pace of capacity release, the performance elasticity driven by the increasing penetration of new energy vehicles, and the ongoing optimization of risk management capabilities. At the intersection of the “dual carbon” strategy and industrial transformation, Yousheng’s case serves as an important reference for industry participants: only through technological innovation and customer-oriented approaches can sustainable development in the lightweight new energy vehicle sector be achieved.