Battery dilemma: a game that can’t be stopped

At present, China has surpassed the United States to take the top spot in the electric vehicle market. The domestic electric vehicle market has ranked first in the world in production and sales for two consecutive years, with a cumulative promotion of more than 1 million vehicles, accounting for more than 50% of the global market. According to incomplete statistics, the planning of traditional automobile companies for new energy vehicles alone is a huge number. The sales target of new energy vehicles in 2020 released by 9 independent automobile companies including GAC, Dongfeng, SAIC, BAIC, Changan, Geely and Chery is close to 4 million vehicles, with a total investment of about 80 billion yuan. In the field of buses, the total investment of new energy vehicles of Yutong, Zhongtong and King Long exceeds 10 billion yuan, and the overall capital of the new energy vehicle industry is expected to exceed 100 billion yuan.

After the subsidy reduction, the sales of new energy vehicles have slowed down this year, but the electrification of automobiles is already a general trend. Whether it is a national or joint venture vehicle manufacturer, or even an Internet car manufacturer that leverages the electric vehicle market, they will not miss out on this expanding piece of cake.

Subsidies are declining, and market and technology are the biggest challenges

At present, almost all Internet car brands choose new energy vehicles as the entry point to open the market, which undoubtedly plays a very important role in cultivating the market and popularizing consumers' understanding of electric vehicles. Cui Dongshu, secretary general of the China Passenger Car Association, told Nandu reporters that in fact, many Internet car brands make such choices. On the one hand, they are in line with the transformation of the automobile manufacturing industry. On the other hand, the threshold for electric vehicle manufacturing is lower than that for fuel vehicle manufacturing, and cross-border car manufacturing has more advantages.

Some industry insiders also analyzed that after the policy subsidies were reduced, the market and technology became the biggest challenges that electric vehicles need to overcome. Since the new energy vehicles ushered in a blowout development, not only have established power lithium battery manufacturers such as CATL, Lishen, and Boston invested in expanding production capacity, listed companies have invested heavily in building factories, and there are also automakers such as Volkswagen, Toyota, and BAIC, who are eyeing them.

Industry insiders believe that due to the reduction in subsidies, the overall sales of new energy vehicles in the first quarter of this year and in April slowed down year-on-year, which means that the demand for batteries has decreased. This is also reflected in the report of Zhenli Research Institute. The battery demand for EV buses in the first quarter of 2017 was only 102,100 kWh, a decrease of 85% compared with 676,800 kWh in the same period of 2016. The battery demand for EV special vehicles has also dropped significantly. The demand for 60,000 kWh in the first quarter of 2017 was almost halved compared with 113,000 kWh in the same period of 2016. The report analyzes that these two major markets are extremely sensitive to changes in subsidy policies, largely because the policy of 30,000 km cumulative mileage requirement has shown its power.

Although the market demand for pure electric buses, which are "large electricity users", has shrunk significantly, the demand for power lithium batteries is still growing rapidly. The report of Zhenli Research Institute also mentioned that the output of "small-capacity" pure electric passenger cars and special-purpose vehicles will continue to grow rapidly. The market performance of EV passenger cars, which mainly focus on the personal market, is obviously better, which also makes the battery demand of EV passenger cars in the first quarter of 2017 966,800 kWh compared with 876,700 kWh in the same period of 2016, an increase of more than 10%, which is the only bright spot in the market of various types of vehicles.

"The success or failure of power batteries determines the success or failure of new energy vehicles"

"The success or failure of power batteries determines the success or failure of new energy vehicles." Wang Binggang, member of the Academic Committee of the China Electric Vehicle Hundred People's Association and leader of the National New Energy Vehicle Technology Innovation Project Expert Group, believes that the power battery industry in the current Chinese market is developing rapidly, but the technology is not in an internationally leading position, investment is too dispersed, and there are still a large number of low-level small-scale battery factories. As for the quality control method of battery monomer finished products, there is still an outdated method of screening, and the rate of unqualified products screened out is as high as more than 10%. There is a huge gap with foreign companies such as Samsung and Panasonic.

The huge market potential of electric vehicles has become a consensus. The Ministry of Industry and Information Technology has also made clear plans that by 2020, the annual output of new energy vehicles will reach 2 million, the energy density of power battery systems will reach 260 watt-hours/kilogram, and the cost will be reduced to 1 yuan/watt-hour.

"The global influence and market share of (my country's) key new energy vehicle companies have further increased, and smart connected vehicles have become world leaders," said Miao Wei, secretary of the Party Leadership Group and minister of the Ministry of Industry and Information Technology. Only in this way can we roll up our sleeves to build a safe and controllable automotive parts system and join the ranks of automotive powers.

"This is a game that cannot be stopped," an industry insider told reporters. Currently, the battery industry for electric vehicles has entered a stage of rapid and healthy development. Although there is a technological gap with international power battery manufacturers, in the case of declining market demand, it is even more necessary to make every effort to increase investment and seize market share, otherwise it will end up dying even more miserably.

A reporter learned that in the first quarter, CATL ranked first with 328,000 kWh of automotive batteries, surpassing BYD, a year-on-year increase of 12.5%. Unlike BYD's closed production chain, CATL is a supplier of power batteries to many automakers such as BMW Brilliance, Geely, BAIC, and GAC. Recently, it will work with SAIC to develop power battery business and plans to establish two new joint ventures.

Last week, BYD, which had just missed the title of new energy vehicle sales champion, announced that it would supply power batteries to all automakers. It can be said that BYD, which started out as a battery manufacturer, has quietly opened a closed loop and is preparing for a counterattack.

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.