Forecast Analysis on the Development of Lithium Electric Equipment Industry in the Next Four Years

Energy conservation and environmental protection pressure and energy security are the internal driving forces for the growth of demand for new energy vehicles. According to statistics, 70 tons of oil in China is used for automobiles, and 50 % of urban air pollutants come from automobiles. The dependence of crude oil on foreign countries has been rising all the time, and it has now reached more than 60. In contrast, on the one hand, new energy vehicles meet the objective requirements of environmental protection and energy security. On the other hand, the new energy automotive industry has been vigorously promoted by various countries as an important economic growth point, including the Freedom car plan launched by the United States, the smart grid plan, and Japan's NEDO plan.

As the seven strategic emerging industries in China, the new energy auto industry is strongly supported by policies. In February 2016, the State Council further clarified its support for the development of the new energy vehicle industry, and proposed measures such as promoting the establishment of innovative power battery platforms, accelerating the construction of charging facilities, and expanding the proportion of new energy vehicles used in urban public transport. With the decrease in the cost of lithium batteries, the increasing abundance of models and the continuous improvement of supporting facilities, the new energy automotive industry is expected to accelerate its growth. According to data from the China Automobile Industry Association, by November 2016, China's total output of new energy vehicles had reached 427,000 vehicles(340,000 pure electric vehicles and 87,000 plug-in hybrid vehicles), an increase of 613.8 vehicles over the previous year.

Taking into account that the average battery capacity of all-electric passenger vehicles is about 25 kW, the average battery capacity of passenger cars is about 150-250 kW, the average battery capacity of special vehicles is about 30-40 kW, the average battery capacity of hybrid passenger vehicles is about 15 kW, and the passenger car is about 30 kW. According to the stock replacement and new demand, it is estimated that the total demand for lithium power for 16 years can reach 30Gw, an increase of nearly 100.

Production capacity of lithium battery manufacturers continues to expand, boosting demand for lithium electric equipment

Benefiting from the rapid increase in the amount of new energy vehicles, lithium battery manufacturers have expanded their production capacity. Take the example of Longtou Guoxuan in the lithium battery industry. Its active distribution of production lines is under construction. The three-phase base production line is at an accelerated construction stage of 450 million angstroms.

In addition to Guoxuan, other companies such as CATL, BYD, Lishen, Lifan, etc. have also launched expansion plans. According to grassroots research and statistics on high-capacity lithium electricity, the planned production capacity of related lithium power companies in 2016 is about 50 GWh, of which the first-line high-end production capacity is about 30 GWh. The high prosperity of the lithium power industry continues to drive the demand for lithium power equipment. In addition, in February 2016, Jianrui Fire announced that it intends to acquire the 100 shares of Wotema, a lithium power company, and at the same time raised 400 million yuan to invest in lithium battery production line projects. The attraction of capital markets also reflects the attraction of the lithium-ion battery industry.

Lithium battery industry has entered the stage of integrated Windows, and secondary expansion has helped increase the demand for lithium electric equipment. On November 22, 2016, the Ministry of Industry and Information Technology issued the "Standard Conditions for the Automobile power battery Industry(2017)(Consultation Draft)", which for the first time put forward clear requirements for the production capacity of power battery company Hedongli battery system enterprises: the annual production capacity of lithium battery monomer enterprises is not less than 8GWh; The power battery system enterprise has a production capacity of not less than 80,000 units or 4GWh. The consultation draft has greatly increased the scale of production capacity of enterprises and the industry threshold has been greatly increased, which will help increase the concentration of the industry. At the same time, leading enterprises and marginal enterprises on the threshold standards may set off a new wave of production expansion.

At present, major lithium battery manufacturers have launched expansion plans. CATL, Guoxuan, and Lishen have 17 years of planned production capacity of 12.6, 9.7, and 6.6 GWh, respectively. It is expected that the total production capacity of major manufacturers in 16 and 17 years will reach 52.2 GWh and 82.1 GWh, respectively. The total output of new energy vehicles in China was 427,000 in November this year. Even if the growth rate is maintained next year, the corresponding battery demand will still be lower than the industry's production capacity. At present, the low-end lithium power production capacity of the industry may appear surplus, while high-end lithium power is still in short supply, Sanyo, Panasonic's three-part lithium battery capacity can already achieve 3.1 AH, and most domestic is about 2.2 AH.

With the lithium battery industry entering the consolidation period, the new wave of production expansion will help the demand for lithium power equipment continue to increase.

Lithium Electric Manufacturing Center to Domestic Transfer, Domestic Equipment Advantages

In the global market, the international mainstream battery manufacturers mainly come from Japan and South Korea. Samsung, Panasonic, LG, Sony and other giants have an absolute advantage. The main reason is that downstream applications, especially new energy vehicles, have higher requirements for lithium battery quality. The domestic lithium battery manufacturing industry is relatively fragmented. The main manufacturers include CATL, BYD, Lishen, Guangyu, and Bic.

Although domestic companies still account for a small share of the entire international market, the lithium ion battery manufacturing center has continued to shift to the domestic market. In the context of continuous optimization of the domestic investment environment and relatively low labor costs, the lithium ion battery manufacturing center has transferred to China according to the path of materials, batteries, and vehicles.

Foreign manufacturers of lithium electric equipment started earlier, especially Japan and South Korea's basic mechanical processing strength, products fine, high degree of automation. The foreign lithium-electric equipment enterprises mainly adopt a single product competition strategy and provide a single link production equipment in the production process of lithium-electric power. Although there is still a certain gap between domestic lithium electric equipment technology and foreign countries, domestic lithium electric equipment has the characteristics of more complete product line and short delivery cycle.

The equipment quality is excellent, and the price effectiveness advantage gradually appears. Foreign equipment research and development started early, and equipment precision and automation are relatively high. However, domestic battery model transformation is relatively large, and the conversion cost of choosing foreign equipment is very high. Domestic equipment is developed and manufactured according to the characteristics of battery production in China, and its adaptability is strong. The price of domestic equipment of the same type is generally only half that of imported equipment. With the continuous improvement of lithium-electric equipment technology, the advantages of cost effectiveness and the substitution effect on imported equipment will become more and more obvious.

Domestic equipment delivery cycle is short. The delivery cycle of domestic equipment is generally 3-6 months, which is much lower than the delivery cycle of imported equipment. Domestic equipment has natural regional advantages.

The product line is full, the whole line solution ability is strong. Foreign equipment manufacturers often provide a single link of equipment, and domestic equipment manufacturers can timely installation and commissioning according to the needs of the company. In addition, the full-line solution can avoid the problems caused by the integration of different links of equipment, which has more advantages.

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