The outcome of the competition for power battery technology routes from the Gree incident

In the main battlefield of power batteries, ternary lithium, lithium iron phosphate, and lithium titanate staged a battery "Three Kingdoms War". The new policy of "subsidizing buses based on battery energy density" has cast a shadow on lithium titanate batteries with lower energy density. Now that Gree is promoting "Yinlong Titanium", it has triggered in-depth thinking about the technical route of power batteries in the industry. Does density really determine everything?

Recently, there have been many different opinions about the dismissal of Ms. Dong Mingzhu. Recently, in an impromptu press conference held by Zhuhai Yinlong for a few investment banks and media, a senior executive from Gree Electric emphasized: "The statement that President Dong (Dong Mingzhu) was dismissed is a normal adjustment of the internal management responsibilities of Gree Group. Although she is no longer the chairman of Gree Group, she is still the helmsman of Gree Electric. The strategic investment of Gree's listed companies in Zhuhai Yinlong will not change."

Within two weeks after Zhuhai Yinlong held a high-profile product launch conference, the transaction-related party, Gree Group, experienced a series of senior management changes and investment targets were reviewed. Obviously, Zhuhai Yinlong, which is currently at the center of the storm, was caught in the crossfire.

On November 11, it was disclosed that the Zhuhai State-owned Assets Supervision and Administration Commission issued a notice to the Gree Group Board of Directors on October 18: "Comrade Dong Mingzhu was removed from the positions of Chairman, Director, and Legal Representative of Zhuhai Gree Group Co., Ltd." From now on, Dong Mingzhu will only be the Chairman, President, and Legal Representative of Gree Electric.

Negative news about Gree and Yinlong kept coming out. For the topic figure Dong Mingzhu (Ms. Dong) and the target company Yinlong that she participated in investing, the release of the media effect obviously far exceeded the controllable range expected by Gree and Yinlong. For a time, the voices that were bearish on "Yinlong Titanium" were endless.

Will Sister Dong’s dismissal seriously affect Yinlong Investment?

In the view of most industry insiders and investors, the reason why Yinlong has attracted so much media attention this time is nothing more than the many uncertainties in policies. As an important project personally managed by Dong Mingzhu when she was the chairman of Gree Group, Yinlong carries the important mission of the strategic transformation of Gree Group. A closer look at the whole process will reveal the truth.

The day after Ms. Dong resigned, the domestic media Southern Metropolis Daily immediately verified with the Zhuhai State-owned Assets Supervision and Administration Commission. In fact, in October this year, the Zhuhai State-owned Assets Supervision and Administration Commission issued a notice that Dong Mingzhu would no longer serve as the chairman of Gree Group, because holding both the "two positions" of the group and the listed company did not comply with the relevant regulations on part-time work in state-owned enterprise reform. This is the critical period for Gree Electric to increase its shareholding in Zhuhai Yinlong. However, the transformation will inevitably experience pain. For Ms. Dong, who always likes to "bite the hard bones", the "rumored" information from the outside world did not stop her from moving forward.

Gree supports high valuation

Before Gree announced its strategic investment in Zhuhai Yinlong, Yinlong Chairman Wei Yincang had already been quietly implementing the full industrial chain layout of new energy vehicles in the new energy vehicle industry with lithium titanate batteries.

On the evening of August 18 this year, Gree Electric Appliances announced that the company's board of directors reviewed and approved the "Proposal on the Company's Issuance of Shares to Specific Objects to Purchase Assets". The company plans to acquire 100% of Zhuhai Yinlong's equity by issuing shares, and the transaction price is 13 billion yuan. Gree's acquisition has been arousing speculation and heated discussions among the media in the industry since March this year, and the acquisition price is even more eye-catching. Recently, the dust has finally settled.

Without mentioning the Gree incident, the company first expressed its views on global policies. It does not want to see the development of domestic new energy vehicles too good, as the Chinese market has been attacked by foreign forces. In terms of performance commitment, Zhuhai Yinlong said that the actual net profit of Zhuhai Yinlong in the three fiscal years of 2016, 2017 and 2018 will not be less than 720 million yuan, 1 billion yuan and 1.4 billion yuan respectively. However, for the bleak Chinese new energy vehicle market in 2016, it is not easy to achieve a net profit of 720 million yuan.

If the promised performance is not achieved, the first measure is usually for the original company's shareholders to compensate for the performance (this is why it is called "betting"). Relying on the original company for "blood transfusion" will directly harm the interests of small shareholders. In addition to the unfulfilled performance, many listed companies also change the original performance commitments after the acquisition is completed, and the ways of change are also strange. This must be the main reason for the conflict between Dong Mingzhu and Gree's small and medium shareholders.

However, some relevant people also said that Yinlong's financial resources, historical integrity and reputation, technical strength and scarcity of core resources in the industry, market environment and policy environment support, and historical return on investment are far inferior to Gree. Yinlong needs Gree far more than Gree needs Yinlong. Therefore, it should not use Gree's stock discount to acquire Yinlong, but should instead require Yinlong to exchange Gree's equity at a large discount. It even proposed to cancel the plan to acquire Yinlong at a high price and instead acquire Yinlong's controlling stake at a reasonable price, or cooperate with Yinlong's lithium titanate battery competitors Microvast and ZTE Paineng. However, such suggestions will not work for Dong Mingzhu, who has a stubborn personality. "Mr. Dong, who has a little understanding of the automotive industry, is very clear that this is an investment field with big capital, big technology, and big strategy. If you don't go high, the final result will be tepid." A Yinlong executive familiar with Dong Mingzhu told Electric Vehicle Hui.

Lithium titanate pays more attention to safety

Undoubtedly, after Microvast Power took the lead in industrializing lithium titanate batteries in China, Yinlong has clearly locked on to this distinctive technology route. The energy density of lithium titanate is indeed not as good as that of conventional lithium iron phosphate batteries and ternary batteries, but the charging and discharging performance, low temperature performance and safety performance of lithium titanate are obvious to all. If safety performance is ignored just because of excessive pursuit of energy density, it will be a fatal harm to China's new energy vehicle industry!

Of course, some experts still have reservations about the rumor that "buses will be subsidized based on battery energy density". According to the basic principle of classifying power batteries according to positive electrode materials, at present, the domestic lithium-ion power battery technology routes are mainly lithium iron phosphate and ternary.

Due to the impact of the Ministry of Industry and Information Technology's "prohibition of ternary batteries from being declared in the passenger car catalog" at the beginning of this year, a source revealed to Electric Vehicle News that domestic mainstream battery companies that mainly use fast-charging technology routes such as lithium titanate will face the crisis of being "shot". Although the battery solutions of these companies have achieved great success in the application of lithium titanate and multi-porous hard carbon by modifying the traditional negative electrode material (graphite), the positive electrode material of lithium titanate batteries is still a ternary system. Therefore, there is still a lot of debate in the industry whether it will be attributed to ternary batteries. And this is exactly what Yinlong is most worried about. Once the technical route of lithium titanate is affected by subsidies, the damage to Gree and Yinlong will be fatal.

In February this year, Wang Binggang, the leader of the expert group of the National Clean Vehicle Action Coordination Leading Group and the specially appointed expert of the 863 Program of the Ministry of Science and Technology for Electric Vehicles, released his research experience on Microvast Power Systems Co., Ltd., a representative company in the field of fast-charging batteries in China, through his personal WeChat Moments. According to Electric Vehicle News, at present, the technical routes of Yinlong and Microvast Power are mainly fast-charging or lithium titanate.

According to Wang Binggang's research experience, he affirmed the application of lithium titanate and multi-component composite lithium-ion batteries in commercial vehicle fast charging solutions.

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.