Space and surplus coexist, and the Matthew effect in the power battery industry begins to emerge

With national support and promising prospects, and with the emergence of highly valued companies, the new energy vehicle power battery industry is gradually becoming the focus of attention in the industry.

Recently, Contemporary Amperex Technology Co., Ltd. (hereinafter referred to as "CATL"), which mainly operates power batteries and energy storage batteries, has attracted much attention in the industry due to its market valuation of more than 84 billion yuan. On June 19, after publishing a listing guidance announcement to officially launch its IPO, the groundbreaking ceremony for the cooperation project between CATL and SAIC Motor was held. The high valuation of CATL has also triggered a new round of heated discussions, including whether the power battery industry has already experienced overcapacity and how it should develop in the future.

In response to this, the relevant person in charge of CATL only responded to the reporter: "We want to make good products pragmatically, and it is not convenient to accept interviews at this stage."

Zhong Shi, a well-known commentator in the automotive industry, said that power batteries are key components supporting the development of pure electric vehicles and have a relatively promising future. However, judging whether its production capacity is excessive cannot be based solely on production figures, but also on the market share of high-quality battery production capacity.

Warlords

Mr. Zhong believes that there are not many power battery products that can truly meet the needs of OEMs. If a power battery manufacturer can stand out in the "oversupply" competition, it will be worth it.

It is understood that the cooperation project between CATL and SAIC Motor plans to build a total power battery capacity of 36GWh, with a total investment of 10 billion yuan in the first phase, and is scheduled to be fully put into production by the end of 2018. According to CATL's capacity planning, its own capacity will also reach 50 GWh in 2020, and the total cumulative investment is expected to exceed 30 billion yuan.

In the power battery industry, besides CATL, BYD, as an industry giant, has to be mentioned. After the news of "BYD power battery export" was confirmed, BYD President Wang Chuanfu said that the export of power batteries has been discussed with several major passenger car companies and has entered the substantive stage. According to He Long, Vice President of BYD Co., Ltd., at the "18th China Qinghai Green Development Investment and Trade Fair-Lithium Industry International Summit Forum", BYD currently has 16GWh electric vehicle production capacity and is expected to reach 26GWh in 2019.

According to He Long's calculations, 26GWh of production capacity is equivalent to the power supply of 400,000 pure electric vehicles or 1.2 million dual-mode vehicles. According to the statistics of China Association of Automobile Manufacturers, the sales volume of new energy vehicles in my country in 2016 was 507,000, of which 409,000 were pure electric vehicles and 98,000 were plug-in hybrid vehicles. According to the sales ratio of commercial vehicles and passenger vehicles in 2016, the total power of batteries produced by CATL and BYD alone in 2020 can provide power for 1.54 million new energy vehicles.

Statistics from the China Chemical and Physical Power Sources Industry Association show that the power lithium batteries sold in 2016 were mainly ternary lithium batteries and lithium iron phosphate batteries, accounting for more than 95%. In terms of the shipments of the two types of batteries, BYD, CATL, Shenzhen Watma Battery Co., Ltd., Guoxuan High-tech Co., Ltd. and other four companies ranked among the top four in the country in terms of lithium battery shipments, accounting for more than half of the 30.5GWh (excluding exports) of lithium power battery companies in my country in 2016. In addition to the above four lithium battery manufacturers with a large market share, there are still many lithium battery manufacturers with high battery shipments such as Zhuhai Yinlong, Tianjin Lishen, and Guangyu Group. The current development of the power battery industry can be described as "a group of heroes fighting for power."

Three-way split

Although there are quite a few new energy battery manufacturers developing in China, there are roughly three categories in terms of the nature of the enterprises. In addition to CATL, which is represented by the role of battery manufacturer, and BYD, which is represented by the identity of automobile OEM, there are also joint venture battery manufacturers with Japanese and Korean backgrounds.

As the head of a company specializing in battery production, Huang Shilin, president of CATL, once said that it might be a misunderstanding for CATL to enter the ranks of electric vehicle manufacturing and sales in the next 10 years. "We are very focused on the research and development and production of power and energy storage batteries and systems, and we have made this research and development and products into an open platform, and launched extensive and in-depth cooperation with upstream and downstream industries to jointly promote the progress and transcendence of China's new energy vehicles and new energy application industries." Because battery companies know the battery cells best, and vehicle companies know the various requirements best, they can learn from each other's strengths and make the products the best. Judging from its current development situation, this is indeed the case. Relevant information shows that in addition to building a joint venture with SAIC Group, CATL has also signed cooperation agreements with BMW, Dongfeng Motor and many other automobile companies.

In addition, BYD, which appears as a vehicle manufacturer in the power lithium battery industry. Affected by factors such as the decline in subsidies for new energy vehicles and the decline in sales of new energy vehicles, BYD's new energy business revenue has declined significantly this year. When predicting the performance in the first half of this year, BYD pointed out in the announcement: "In the second quarter of 2017, as the new energy vehicle market gradually picks up, the group's new energy vehicle business will also gradually recover. It is expected that the sales of new energy vehicles will increase significantly month-on-month, and it will also maintain a good development momentum compared with the same period last year, but profits are still under pressure due to the decline in subsidies." Under the influence of multiple factors, BYD decided to change its long-standing closed supply form and began to sell BYD power batteries to the outside world. In this regard, some industry analysts said that BYD is both a battery supplier and a vehicle manufacturer, and is in competition with other vehicle manufacturers. It is not easy for BYD to enter the vehicle supply chain system of other brands.

Affected by the relevant documents such as the "Regulation Conditions for the Automotive Power Battery Industry", Japanese and Korean battery giants such as Samsung SDI, LG Chem, SKI, and Panasonic have not yet been included in the catalog. Although domestic lithium battery companies still have certain advantages in terms of capital, market, customer relations, etc., there is indeed a certain gap between domestic battery companies and Japanese and Korean companies in terms of technology and management. Under the premise of gradually liberalizing market competition, it is very likely that a competition pattern will be formed in which battery manufacturers, OEMs, and Japanese and Korean joint ventures will "divide the world into three parts."

Mixed feelings

Although major battery manufacturers are constantly making moves in power battery production, my country's current power battery market is mixed. According to data from the China Association of Automobile Manufacturers, in May this year, the production and sales of new energy vehicles reached 51,000 and 45,000 respectively, up 38.2% and 28.4% year-on-year respectively. In the first five months, the production and sales of new energy vehicles reached 147,000 and 136,000 respectively. Under the premise of a narrowing growth in sales of new energy vehicles, the power battery market is not optimistic.

In addition to market factors, changes in national policies will also have a certain impact on the development of power batteries. In March, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance and other four ministries jointly issued the "Action Plan for Promoting the Development of the Automotive Power Battery Industry", which clearly stated: By 2020, the total production capacity of the power battery industry will exceed 100 billion watt-hours (100GWh), forming a leading enterprise with a production and sales scale of more than 40 billion watt-hours (40GWh) and international competitiveness. Industry analysts believe that this document shows that before 2020, domestic batteries will still be the primary consideration of automobile manufacturers, and this document brings opportunities for the development of independent power batteries.

However, some analysts believe that the domestic power battery industry has a hidden worry of insufficient research and development of high-end products. The root cause lies in the sluggish development of independent research and development technology. In addition, due to the insufficient supply of production lines, many companies have blindly expanded their production lines to meet the needs of the new energy vehicle industry in order to seize the huge market. Ignoring technology research and development is a common problem among many power battery companies. The new energy vehicle market is always expanding. The power battery industry undoubtedly has huge potential prospects and benefits. As the company's core profit growth point, companies still need to strengthen their understanding of technology research and development. Blindly expanding production space will inevitably be eliminated by the fiercely competitive market.

In this regard, Master Zhong told reporters that although free competition and natural elimination will cause waste of resources, this is a necessary process in the power battery industry. "Without local overcapacity and local competition, industry giants will not be born."

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.