Power battery madness leads to overcapacity: 85% of the country's production capacity will be idle

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In 2017, China's new energy (6.560, 0.44, 7.19%) vehicle production will reach 700,000 units, corresponding to lithium-ion installed capacity will reach 30GWh. The capacity utilization rate is about 15%.

Near the end of the year, the battery factory sales Xiaowang became more and more leisurely. On the winter solstice on December 22, Xiao Wang sat in the office to play mobile phones in the morning, no customer contact.

"At this time of the previous two years, the mobile phone kept ringing, all orders were placed or requested to be shipped." Xiao Wang said. The new energy vehicle market will be “crazy” at the end of the year, and the market will suddenly heat up, and the power battery will be in short supply. At that time, the new energy vehicles broke out under the impetus of the subsidies, but the industrial chain support was not complete and the battery capacity was in short supply. For companies that entered the power battery industry earlier, products are often snapped up.

However, this year's power battery market has undergone tremendous changes. On December 20th, China Chemical (7.760, 0.31 and 4.16%) and Yanlong Liu, secretary general of the Physical Power Industry Association, said in an article forwarded by WeChat friends circle, "The battery market has entered a distinct off-season. It’s not the same, the power battery factory has become the sandwich layer of car companies and raw materials companies, and they are both at the same time.”

Most of the battery companies that are left out of the door are small battery factories that are called low-end capacity in the industry. This year's sales performance and profits have both fallen and fell. The deep reason behind this is that the supply and demand situation in the entire market has reversed.

"In the past few years, the power battery has been in short supply in some time periods and has been snapped up. The demand for power batteries is still increasing overall this year, but because of the large production capacity, the situation of uncompetitive small enterprises is worse." Yanlong Liu said to the 21st-century economic report reporter. Xiao Wang’s battery factory used to produce mobile phone batteries. In the past two years, it began to turn to power batteries. In Shenzhen, there are many such battery companies. "To do power battery, not to dig a few people, you can do a few types of equipment, and now battery technology upgrades quickly, many small businesses cannot keep up." Yanlong Liu said.

According to data released at the 5th Lithium Power Davos Forum, from January to October 2017, the cumulative installed capacity of domestic new energy vehicle power batteries was 18.1GWh, while the domestic power battery capacity has exceeded 200GWh, and the production capacity is seriously overcapacity.

“In fact, it refers to the excess capacity of low-end production. At present, there are more than 200 battery factories in China, but 80% of the shipments are completed by the top ten enterprises in the industry. That is to say, sales are concentrated in high-quality battery factories with strong strength. Other manufacturers are sharing the remaining 20% of the market, so this will happen." A battery company insider ranked in the top five power battery installed capacity said.

More than 100 companies emerged in two years

In 2011, when China's new energy vehicles started, the domestic power lithium battery capacity was only 3,200 MWH, while the output was only 653 MWH.

However, in the second half of 2014, new energy vehicle sales appeared to be “squatting” under the effect of subsidies, and the power supply of power battery companies was tight. Many new energy vehicle enterprises received orders, but they could not buy enough power. The battery is installed.

Under this circumstance, the car companies are not picky about the quality of the power battery. "At that time, the subsidy had only a few parameters such as the battery life mileage. The subsidy for the machine was basically obtained, but the battery output was still Supply is not up." Xiao Wang said.

Soon, the power battery capacity and projects began to go crazy. According to GBII (High-Tech Lithium-Ion Research Institute), in 2015, China Power (24.190, 0.38 and 1.60%) lithium battery capacity increased from 73MWh to 204MWh, an increase of 179%.

In Yanlong Liu's view, there are three main forms of power battery capacity investment: 1. The original power battery companies expanded their production capacity; Enterprises that have not done power batteries before, build power battery production lines, increase power battery business, such as enterprises that make electronic products batteries, enter the power battery; Other capitals came in and started to use power batteries from scratch.

The expansion of the power battery boom, the core driving force is the explosion of new energy vehicle sales, but the capacity expansion of the battery far exceeds the growth rate of new energy vehicles. According to the China Chemical and Physical Power Industry Association, at the end of 2016, China's power battery capacity reached 101.3GWh, while shipments were the only 28GWh. The capacity bubble has been very serious.

Behind the abnormal expansion, there are deeper reasons: the state's policy support for new energy vehicles, including huge financial subsidies, local government strong support in attracting investment, etc., has driven investment impulses.

"In recent years, as long as it is said to be a new energy vehicle, or an industry related to the chain, many local governments are all green light in attracting investment, not only in terms of land, taxation, etc. but also support funds. Some enterprises also took a lot of lands." A battery factory executive told the 21st Century Business Herald.

In this context, the number of power battery companies has also soared. According to GBII data, the number of Chinese power lithium battery companies in 2015 was about 84. According to other channels, the number of power battery companies reached more than 200 in 2017.

Giants expand production new stage

Even in 2017, when the government subsidies for new energy vehicles have fallen sharply, car companies have pushed down the price of power batteries, and raw materials have risen sharply, the pace of capacity expansion of battery companies has not stopped.

On December 14, BYD (50.360, 1.11, 2.25%) revealed that the capacity of BYD battery will reach 16GWh, including 6GWh ternary battery and 10GWh lithium iron phosphate battery. Next year, BYD will also expand the production capacity of 10GWh ternary material batteries in Qinghai, reaching 26GWh overall.

A group of comparable data is that last year, BYD's production capacity was the only 10GWh, and the competitor Ningde era was the only 8GWh. But the longer-term plan for BYD's battery is to expand its production capacity to 40GWh by 2020. The Ningde era is expected to expand to 50GWh this year.

However, at this time, the expansion of battery capacity has been different from the disordered state of the previous two years but has entered a new stage of expansion of the giants. Enterprises with larger capacity expansion plans are mainly the top five companies with the largest installed capacity of power batteries, and they have already gained certain recognition in the market.

"Shenzhen has a lot of battery companies, BYD, Waterma, Bak are among the big companies, and now their sales are still relatively good, we can't compare with them." Xiao Wang's battery factory, I dare not expand production.

In fact, many battery companies interviewed by 21st Century Business Herald reporters, battery companies ranked top in terms of installed capacity, are not pessimistic about market expectations. According to the statistics of the "New Energy Automobile Industry Chain Database" released by GBII, the total installed capacity of new energy vehicles' power batteries in October 2017 was about 2.93GWh, a year-on-year increase of 49% and a decrease of 6% from the previous month. Among them, the total installed power of the top ten power battery companies totaled 2.27GWh, accounting for 77% of the overall. The top five companies are Ningde Times, BYD, Waterma, BAK Battery, Guoxuan Hi-Tech (17.780, 0.82, 4.83%).

The power battery industry coexists with seawater and flames. On the one hand, large companies continue to expand on a large scale, and on the other hand, small businesses enter the reshuffle period. In the next three years, 90% of small enterprises will be eliminated, which has become the consensus of the power battery industry.

"The power battery technology has been upgraded very quickly. Many small enterprises can't keep up with the capital and technology investment. The situation of small and scattered is very common." Yanlong Liu said. At this time, the state subsidies have certain requirements for the battery's cruising range, energy density, and even quality. The products of small battery manufacturers are difficult to adapt to market demand.

In the battery factories visited by the 21st Century Business Herald reporters, some companies still use workers to take the ruler and measure the thickness of the pole pieces. "The thickness is not consistent, which determines the consistency of the battery pack. This is a very critical process. Now big companies are using intelligent production testing, but some small companies still use labor." A battery industry expert said.

"Overall, the power battery's 'small and scattered' pattern has not been fundamentally resolved. The contradiction of high-end production capacity and low-end overcapacity has become more intense this year," said the insiders of the battery company.

“The low-end production capacity is already at a disadvantage in terms of the product price, safety, and service life. The power battery can meet the life span of five to eight years, which is a huge question for low-end production capacity.” Yanlong Liu said.

What kind of battery is surplus?

The power battery is still dominated by lithium iron phosphate and ternary material batteries. According to the survey data of the total installed capacity of power batteries in GBII in October 2017, the total installed capacity of 2.93GWh, lithium iron phosphate, and ternary material batteries totaled 2.68GWh installed capacity. , accounting for 91.6%.

However, the proportion of installed capacity of ternary material batteries has risen rapidly, and many large companies' future capacity investment plans are also based on ternary material batteries.

“The increase in the installed capacity of ternary materials and the new capacity planning are guided by policies. State subsidies have requirements for specific energy, and ternary materials have higher specific energy than energy, so the current situation has emerged.” Yanlong Liu said.

For the advantages and disadvantages of the two technical routes of lithium iron phosphate and ternary lithium, the person in charge of R&D of a power battery company believes that it is not easy to characterize the specific energy of the monomer because the battery is a parameter and needs large-scale industrial application.

The above-mentioned person believes that although the energy density of the ternary energy may be higher than that of lithium iron phosphate, the energy density during use is not as high as that of the lithium iron phosphate battery. Taking a lithium iron phosphate cell as an example, the energy density is 126Wh/KG, the group utilization rate is 70%, and the utilization rate is 80%, then the final energy density is 70Wh/KG. For the long life of the ternary battery, if the fast charge and fast release are easy to cause the loss of control, the cooling system needs to be used, and the available energy is only 47%. At the same time, in order to ensure safety, the SOC can only use 70%, which greatly reduces its efficiency.

"In the process of use, the energy density of lithium iron phosphate is higher than that of ternary material batteries. At present, the supply of lithium iron phosphate battery is indeed excessive, and the ternary material battery is relatively scarce, but it is not a problem of battery route, but policy guidance. Caused by," said the person. In the process of industrialization, the industry consensus is that lithium iron phosphate is superior to ternary material batteries. "Cobalt and nickel required for ternary materials basically need to be imported, increasing production costs, and the safety is not as good as lithium iron phosphate. Before, it was temporarily banned by the Ministry of Industry and Information Technology from being loaded into new energy buses due to safety problems. Therefore, in reliability, lithium iron phosphate is more controllable than ternary in terms of consistency, stability, and cost," said the source.

"Some people say that the excess of power batteries is a structural excess of lithium iron phosphate and ternary material batteries. I don't agree. In the future, short-distance, shared, and buses will still choose lithium iron phosphate batteries." Yanlong Liu said.

The state plans to completely eliminate subsidies for new energy vehicles by 2020, when the company may reposition the choice of battery routes. “When car companies choose to use power batteries, if they consider cost, safety, and service life alone, it will not be the case when they win.”

In addition, there are people who worry that the current overcapacity of the power battery as a whole may lead to an excess of upstream raw materials.

The raw materials of the power battery include a positive electrode material, a negative electrode material, a separator, an electrolyte, a conductive agent, a binder, a tab, an aluminum-plastic composite film, and the like. The four main materials are cathode materials, anode materials, separators, and electrolytes.

Yanlong Liu believes that cathode materials, anode materials, and separators may have excess conditions in the future, but they are not prominent at present. The upstream materials, cobalt, and nickel are relatively scarce.

The person in charge of R&D of a battery manufacturer in Shenzhen revealed that the cathode material has sufficient capacity; the most important material for the electrolyte is lithium hexafluorophosphate, which accounts for half of the electrolyte cost. With the increase in production capacity of upstream materials companies, the production capacity has increased significantly, which has eased the tight supply situation in 2016. The important materials such as graphite, although rich in natural graphite, are affected by environmental protection and supervision, and there is a risk of price increase in the short term. In view of the lack of supply; the diaphragm has been tightly supplied, because the wet diaphragm is thinner and more difficult, and the diaphragm will further increase in capacity and performance in the next two or three years.

"Overall, the supply and demand of raw materials are basically balanced, and there is no serious excess of battery capacity. The cobalt and nickel required for ternary material batteries are in short supply and demand, and prices are rising rapidly," said the source.

Who will take over the elimination of production capacity?

The power battery industry has entered the stage of eliminating the reshuffle, and the factors that push small enterprises out of the market, in addition to over capacity, there is also the price increase of raw materials such as cobalt. “Now the price of cobalt is still rising, and the price has doubled this year,” said Yanlong Liu.

According to data on December 20, the latest cobalt price has reached 51.7-53 million Yuan/ton, up 7,000-20000 Yuan/ton from a week ago.

The most important upstream materials used in the positive electrode include lithium ore, cobalt ore, nickel ore, and manganese ore. “The release of cobalt ore may be difficult to keep up with the rapid growth of demand, and cobalt prices are still expected to remain relatively high,” said the head of the battery company.

On the demand side, the overall price of the power battery pack is also a trend. The subsidies for new energy vehicles have been declining year by year. This year and next year, it is the stage with the largest decline. New energy car companies face huge cost pressures, and the cost of battery packs accounts for 40%-50% of the cost of a car, which is the focus of cost reduction.

The battery industry is facing pressure from both upstream and downstream, and small businesses are still caught in a dilemma of not going up the scale and reducing costs. "In addition to the quality competition of batteries, there is competition for cost. Large-scale applications are crucial for power batteries, and are important measures for power battery companies to expand market share and reduce costs," said the insiders of the battery companies.

According to the statistics of a large battery factory for market demand, in 2017, China's new energy vehicle production will reach 700,000 units, corresponding to lithium power installed capacity will reach 30GWh, the capacity utilization rate is about 15%.

In the longer term, according to the national plan for the promotion of new energy vehicles in 2020, the production capacity of pure electric vehicles and plug-in hybrid vehicles will reach 2 million. "If the 1GWH corresponds to 20,000 passenger cars or 0.85 passenger cars, it is estimated that the total battery capacity of passenger cars and buses will be 226.84GWh by 2020," said the person in charge of the above-mentioned battery companies.

At present, the domestic power battery capacity has exceeded 200GWh. If the production capacity of the top ten battery companies is fully released according to the company's expansion plan, by 2020, the market demand will be met. Small businesses are faced with life and death choices, but due to low technology content and backward technology, the path of low-end capacity elimination is not clear. "At present, the production capacity of large enterprises is mainly self-built. It is difficult to say whether it is to acquire small enterprises. It mainly depends on the price of enterprises. This year, there are still some markets for small enterprises, which may have higher prices. The future is very difficult, and the price may be very low. Yanlong Liu said.

There is also a way that small businesses may introduce new investors. But this integration is difficult to save low-end production capacity.

However, the future prospects of power batteries are still very optimistic. The market share will be concentrated in large enterprises, which will push the industry's R&D strength, market share, scale application, and management level into a new stage.

"Even in the global market, Chinese power batteries now offer three advantages: low manufacturing costs; the world's largest consumer market for power batteries; Lithium-ion battery has formed a relatively complete industrial chain. " power battery companies will not lose out to Japanese and Korean companies, said the battery company research and development person in charge.

The page contains the contents of the machine translation.