Support for domestic power battery companies will be significantly reduced

According to reports, China plans to completely eliminate subsidies for electric vehicles by 2020, and domestic power battery companies will receive a significant reduction in support. South Korean battery companies foresee this opportunity to plan to invest in the Chinese market to build battery factories, hoping for a share. This will be a great challenge for Chinese power battery companies.

Chinese power battery Enterprises Growing up on the Domestic Market

In the past three years, China has been the world's largest market for new energy vehicles. In 2017, 1.42 million new energy vehicles were sold worldwide. The number of new energy vehicles sold in China reached 777,000, and the proportion of new energy vehicles sold in China accounted for 54.7 % of the global market. Of the new energy vehicles sold in China in 2017, 652,000 were pure electric vehicles, accounting for 83.9 % of China's new energy vehicle sales in the same period.

Since June 2016, many foreign power battery companies have been excluded from the subsidy program, making them the biggest beneficiaries.

According to statistics, in 2017, the domestic power battery market TOP5 is a domestic battery company. They are the Ningde era, BYD, Wotema, Guoxuan Gaoke, and Bic. The battery sales are 10.57 GWh, 5.66 GWh, and 2.41 GWh, respectively. 2.05 GWh, 1.66 GWh. The battery companies ranked first, third, fourth, sixth and ninth in the global power cell market, thanks to their sales of power batteries in the Chinese market.

The removal of Chinese subsidies for electric cars will test domestic power battery companies

China expects to eliminate subsidies for electric vehicles completely by 2020, so that domestic power battery companies will stand on the same starting line as foreign power battery companies. The competition between domestic power battery companies and foreign power battery companies will need to rely on their own strength to compete for market share. When electric vehicle companies purchase batteries, they will mainly consider the comprehensive advantages such as the price, quality, and technology of power battery companies.

According to data from the global power battery market in 2017, among the domestic power battery companies TOP5, the proportion of power batteries sold in the Ningde era, BYD, Wotema, and Guoxuan Gaoke was about 87 %, 78 %, 43.8 %, respectively. 64 %, Bic is almost entirely dependent on the domestic market, showing that these domestic power battery companies are quite dependent on the domestic market.

South Korean companies LG Chemical and Samsung SDI have begun to deploy the Chinese market ahead of time, indicating that other overseas power battery companies will also quickly follow suit. After all, China, the world's largest power battery market, does not want to miss it and wants to take a share of it. This will lead to increased competition in the Chinese power battery market.

In fact, outside the Chinese mainland, the largest supplier of power batteries is Panasonic, Panasonic is also the supplier of Tesla, the world's most famous electric vehicle company, followed by LG Chemical. There is still a certain gap between the competitiveness of Chinese power battery companies in overseas markets and these companies. If the Chinese power battery market is completely liberalized into the stage of free competition, it will undoubtedly test the competitive strength of domestic power battery companies. Of course, this is also a step that Chinese power battery companies need to take sooner or later. After all, a company must rely on itself to be strong.

With the rise of the Chinese electric vehicle market, internationally renowned automotive companies have also actively expanded the Chinese market and plan or have launched pure electric vehicles in the Chinese market. These internationally renowned automotive companies have their original battery suppliers are overseas power battery companies. This is also relatively advantageous for overseas power battery companies.

Of course, domestic power battery companies have gradually begun to have their own competitive advantages after relying on the development of the domestic market. For example, Wotema has sold more than 50 % of power batteries in overseas markets. In the future, after the market enters the stage of free competition, these domestic power battery companies with competitive advantages may exercise themselves to further enhance their competitiveness in the fierce market competition, but it is beneficial for them to further expand the international market.

The page contains the contents of the machine translation.