Car companies also need to make batteries, so what should power battery companies do?

At present, there is a trend in the automotive industry that car manufacturers are building their own battery production plants. Generally speaking, in addition to building their own factories, car companies mainly carry out industrial supporting through procurement, joint ventures, holdings, and industry alliances with division of labor and cooperation.

For car companies, having more say in batteries can bring more benefits. Batteries have a large profit margin and account for a large proportion of the cost of the entire vehicle. If car companies can control battery manufacturing, there will be more room for price cuts. The state's subsidies for new energy vehicles tend to be gradually reduced. For car companies, reducing costs as soon as possible can survive the subsidy decline.

At present, the survival environment of power battery companies is worrying. On the one hand, the price of battery raw materials is rising, and the profit margins of power battery companies are being squeezed; on the other hand, as subsidies are declining, car companies are constantly lowering the price of power batteries.

Car companies do not want to limit their own production capacity due to battery supply. At present, there is a structural contradiction in the power battery industry, with overcapacity at the low end and insufficient capacity at the high end. Car companies are more willing to pin their hopes on themselves.

The recent frequent fires in electric vehicles have aroused concern, and the safety of power batteries has been questioned. If car companies can control battery production themselves, they will have better control over battery quality. More importantly, once an accident occurs, the car companies will be the first to be affected, and they do not want to take the blame for the battery factory.

BYD has a tradition of vertical integration, with both battery and automobile businesses. However, BYD is a minority in the industry. Companies such as Geely and BAIC are now seeking a say in the battery business. Geely has built its own battery factory and invested in other mature battery factories to develop its power battery layout. BAIC has established joint ventures with other power battery companies, built industrial parks, and introduced power battery companies to settle in.

In the next few years, car companies will pay more and more attention to the integration of the entire industrial chain, and the models they produce will mainly use their own batteries.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.