Green & Smart Cables: New Energy’s $1T Market Explosion

1.Market demand explodes, and new energy installation drives a market worth hundreds of billions of yuan

The global energy transformation wave has opened up a broad incremental space for the wire and cable industry. State Grid plans to invest more than 650 billion yuan in 2025, and ultra-high voltage transmission projects are accelerating, directly driving a surge in demand for high-voltage and ultra-high voltage cables.

These projects have extremely high requirements for cable technical indicators, such as the breakthrough in the localization of ±535kV flexible DC cables, which indicates that Chinese companies have significantly improved their competitiveness in the high-end market.

The new energy field has become a growth engine. The newly installed capacity of offshore wind power is expected to reach more than 10GW in 2025, and the demand for ultra-high voltage submarine cables is showing an explosive trend.

The submarine cables of wind farms not only need to withstand high-voltage environments, but also need to have corrosion resistance and tensile strength. Technical barriers have built a moat for leading companies such as Zhongtian Technology and Hengtong Optics.

The photovoltaic industry also contributed significantly to the growth. As the proportion of flexible DC cables in photovoltaic power stations increases, the demand for supporting cables has also risen. In 2025, the global wire and cable market is expected to exceed 1.5 trillion US dollars, of which China accounts for more than 40%, and the share of new energy-related high-end special cables will increase from 18% to 30%.

The wave of transportation electrification has opened up new space at the same time. The total mileage of China’s urban rail transit has exceeded 15,000 kilometers, and the construction of high-speed railways has promoted the demand for traction power supply cables and signal cables to increase by 30%-40%. The expansion of the transportation network has put forward higher requirements for the vibration resistance and anti-interference performance of cables, driving product upgrades and iterations.

2.Technological innovation is accelerating, and material revolution and intelligent upgrades are leading the future

The stringent requirements of new energy scenarios for cable performance are forcing technological leaps. Breakthroughs in the field of materials are particularly critical. The popularization of high-performance polyimide insulation materials has increased the heat resistance of cables by 30%-50%.

This material can withstand extreme temperature fluctuations and ensure the stable operation of photovoltaic power stations and electric vehicles in complex environments. The research and development of new conductive materials such as carbon nanotubes and graphene has accelerated, significantly improving the efficiency of power transmission by reducing resistivity.

Structural design and process innovation are advancing simultaneously. The rise of high-power liquid-cooled supercharging technology has spawned demand for new cables. Leading companies have developed small outer diameter, lightweight liquid-cooled cable solutions for use in supercharging stations such as “Ji Neng”.

This innovative design solves the heat dissipation problem during fast charging, improves charging efficiency by more than 30%, and removes key obstacles to the popularization of electric vehicles.

Intelligence has become the next generation of competition focus. The market size of smart cables is expected to increase by 35%-40% annually, with penetration rates of 30% and 25% in the power and transportation fields respectively. Distributed fiber optic sensor cables can monitor temperature and stress parameters in real time, with a fault warning accuracy rate of over 95%, reducing the cost of power grid operation and maintenance by more than 20%.

Blockchain technology is applied to the traceability of the entire life cycle of cables, enhancing the credibility of quality and reshaping the industry’s trust mechanism.

Technological progress also brings about an efficiency revolution. The popularization of continuous casting and rolling technology has increased the utilization rate of copper materials to 98%, significantly reducing production costs. AI visual inspection and robot automated production lines have reduced product defect rates by 50% and increased production efficiency by 30%.

These innovations have built the core competitiveness of technology-leading companies.

3.Fluctuations in raw material prices and cost pressures test the resilience of companies’ survival

The sharp fluctuations in copper prices have become the biggest uncertainty factor in the industry. In 2025, international copper prices will fluctuate in the range of 8,000-10,000 US dollars per ton, directly squeezing the profit margins of companies. This fluctuation is transmitted to the production end, forcing companies to adopt diversified response strategies.

Head companies lock in costs through futures hedging, such as listed companies such as Far East Holdings, which use financial instruments to smooth price fluctuations. Limited by funds, small and medium-sized enterprises have turned to aluminum core alternatives, driving the output of aluminum core cables to grow by 15% year-on-year.

Although material substitution reduces costs, technical difficulties such as conductivity and connection reliability need to be overcome. Supply chain integration has become the key to breaking the deadlock. Leading enterprises extend cooperation to upstream, and reduce procurement costs by 10%-15% by participating in mines and signing long-term contracts.

Jiangsu Shangshang Cable and other companies have built a “production-recycling-reuse” closed loop, increasing the recycling rate of waste cables to more than 80%, reducing dependence on primary copper.

Process optimization also alleviates cost pressure. Jinbei Electric has reduced the amount of conductors by 8% without affecting performance by improving the bundle twisting process. Xinhongye has developed ultra-thin insulation layer technology to reduce material consumption while ensuring the withstand voltage level.

These micro-innovations have become the key weight for the survival of enterprises in the context of the industry’s profit margins generally being compressed to 3%-5%.

4.Environmental protection and green transformation, policies and regulations reshape the industry ecology

The global carbon neutrality goal promotes the overall improvement of environmental protection standards. The proportion of low-smoke halogen-free and flame-retardant cables in infrastructure projects has jumped from 30% to 40%-45%, and the market size has increased by 35%-40% annually.

This type of cable minimizes toxic gas emissions under fire conditions and ensures the safety of personnel evacuation. It has become a mandatory standard for public facilities such as subways and hospitals.

International green barriers continue to rise. The EU carbon tariff (CBAM) has been extended to cable products, and export companies are facing additional cost pressure. In response to the challenges, leading companies have accelerated the layout of green electricity production and recycled material applications. For example, Hengtong Optoelectronics installed photovoltaic roofs in its Southeast Asian factories to achieve zero carbon emissions on the production line.

The domestic “dual carbon” policy is also strict. The company’s environmental protection process investment increased by 30%-40%. Through measures such as waste heat recovery and energy consumption monitoring, the unit product energy consumption was reduced by 15%-20%, and pollutant emissions were reduced by 20%-25%.

Green production certification has become a bidding threshold. For example, Baosheng Co., Ltd. won the bid for the Singapore power grid project with its zero-carbon factory certification.

The research and development of degradable materials has opened up a new path. Bio-based polylactic acid insulation materials have begun to replace traditional PVC. Although the cost is 40% higher, the carbon emissions over the entire life cycle are reduced by 60%.

With the implementation of the EU Ecodesign Directive (ErP), this type of environmentally friendly materials will change from a “plus point” to a “necessity”, and companies that make early arrangements will gain market opportunities.

5.Industry integration and internationalization, reshaping the pattern under the concentration increase

Market concentration is accelerating. The market share of the top ten companies in the industry has increased from 40% to 45%-50%, and small and medium-sized enterprises are facing the pressure of elimination. Behind this integration is the highlighting of the scale effect – the advantages of leading companies in raw material bargaining, R&D investment, and certification acquisition form a positive cycle.

International layout has become the key to breaking the deadlock. Infrastructure projects along the “Belt and Road” have driven the demand for cables to exceed US$50 billion, and Chinese companies have occupied 20%-25% of the market share with their advantages in ultra-high voltage and submarine cable technology.

Zhongtian Technology established a production base in Vietnam to circumvent the restrictions of the US “Inflation Reduction Act” and radiate the ASEAN new energy market at the same time.

Differentiation competition strategies in regional markets emerge:

• Southeast Asian market: Optimizing cable weather resistance for high temperature and high humidity environment
• European market: Entering mainstream power grid projects through CE and UL certification
• Middle East market: Localized factory construction to cope with the challenge of temperature difference between day and night in the desert

Technical standard output strengthens discourse power. Chinese companies participated in the formulation of the IEC 62895 (±535kV high-voltage DC cable) international standard, changing the past situation of passively following European and American standards.

This “technology going overseas” model has been verified in the Saudi Red Sea New City photovoltaic project, and Chinese cable companies provide a full set of solutions from products to design specifications.

6.The competitive landscape is differentiated, and technical barriers build a moat

The industry presents a “pyramid” competition landscape. The high-end market is dominated by leading companies with the ability to layout the entire industrial chain. For example, Hengtong Optics’ R&D investment accounts for 4% of its revenue, covering the entire value chain from material R&D to engineering services.

These companies focus on high-gross-profit areas such as 800V high-voltage charging cables and robot flexible cables, with gross profit margins exceeding ordinary cables by more than 50%.

Hidden champions emerge in the segmented track. Wuxi Xinhongye focuses on new energy special cables. In 2024, the revenue of new energy vehicle cables was 1.486 billion yuan, a year-on-year increase of 32.33%.

Its liquid-cooled super-charging cable technology is equipped with Geely’s “Extreme Energy” charging station, which solves the heat dissipation bottleneck of high-power charging and establishes a leading position in the market segment.

Cross-border competition reconstructs the value chain. CATL launched a “battery + cable” integrated solution, which improves charging efficiency by 25% through battery thermal management technology and cable current carrying capacity matching design.

Huawei implants communication chips into photovoltaic cables to achieve component-level power generation monitoring, and traditional cable companies face the risk of being integrated by the ecosystem.

The divergence of capital market attitudes reflects the changes in the industry. Wanma shares rose 6.37% against the trend due to the layout of new energy cables and smart grids; while Baosheng shares fell 25.25% due to the squeeze of raw material costs.

This differentiation shows that investors prefer companies with technical barriers and market segment control rather than pure scale advantages.

Summary

Under the wave of global energy transformation, technology iteration, demand upgrade and global competition have become the three core propositions for the development of the wire and cable industry.

Leading companies have shifted from price competition to value competition. By building the full industrial chain capabilities of “material research and development-intelligent manufacturing-system integration”, they have taken the lead in the 19.5 billion yuan new energy vehicle cable market and the 50 billion US dollars “Belt and Road” infrastructure project.

The future winner depends on three capabilities: the depth of integration of intelligent cables and the Internet of Things, such as distributed optical fiber sensor cables that make the accuracy of power grid fault warning reach 95%; the speed of green closed-loop construction, the EU carbon tariff forces the proportion of recycled copper to increase; global technical standards discourse power, the international certification of ±535kV flexible DC cables led by Chinese companies reshapes the rules of competition.

The next round of reshuffle in the wire and cable industry no longer depends on the scale of production capacity, but on the strategic wisdom of balancing innovation efficiency and sustainability under the green framework.