BYD battery business will move towards independence

Under the fierce attack of the Ningde era, BYD's battery business is trying to move from a closed supply chain system to an open door, and has frequently negotiated with a number of vehicle manufacturers. BYD's lithium battery production base in Qinghai is about to be put into production and will be able to support more battery products in the future.

BYD, the biggest earner of the new energy car policy, is now in a period of relatively painful adjustment due to the steep decline in subsidies. In the first quarter of this year, BYD's report card was surprising. With operating income rising by 17.54 %, net profit fell 83 % to 102 million yuan from a year earlier, and net profit or even loss of 329 million yuan attributable to shareholders of listed companies after deducting non-recurrent profits and losses. The same period last year was a profit of 446 million yuan.

In fact, BYD's new-energy car business is still growing fast. However, the growth rate of BYD's new energy vehicles will not necessarily offset the impact of the shrinking subsidies, and many car companies, including the new forces of car building, are making it more and more difficult for BYD's new energy vehicles to maintain their previous glories. This is particularly true when subsidies continue to recede and may even be eliminated earlier. Recently, BYD launched the first EV 360 within 100,000 yuan, hoping to drive the sales of new energy vehicles further.

Batteries and cloud tracks are two other important ways for BYD to break through. BYD recently made a series of moves on the cloud track. After winning a $689 million cross-sea cloud track project in Brazil, BYD signed a cloud track project with Badan Province of the Philippines. This is BYD's second cloud track order in the Philippines. There is no doubt that the cloud track is an important business to drive BYD's future growth. However, the cloud track investment is relatively large and the profit model is to be examined.

As a matter of urgency, BYD needs to devote more energy to thinking about the future development of the battery business. BYD, which started with batteries, has gradually embarked on a diversified route, extending to fields such as IT, automobiles, and cloud rails. Many sections are inextricably linked to the battery business. It is worth noting that as a manufacturer of global consumer electronics product design, component production, and whole machine assembly, BYD's products cover mobile phones, tablet computers, notebook computers, and other consumer electronics products, but do not produce their own brand of whole machine products. Mainly for Samsung, Huawei, Apple, Lenovo, Vivo, Xiaomi and other smart mobile terminal manufacturers. However, unlike in electronics such as mobile phones, BYD has embarked on the road of building its own brand in the automotive industry. As a result, BYD is now actively breaking out of self-sufficiency and starting to sell power batteries to other car manufacturers. It may be an embarrassment: Other vehicle factories are more or less worried about BYD's external supply of batteries that are the same as BYD's own, even if BYD emphasizes that there is no difference between the inside and outside, but it is still difficult to dispel customer speculation.

In fact, many manufacturing companies have encountered similar problems. Few companies can successfully balance the two businesses of OEM and their own brands in the same field or related fields. In the future, BYD will supply power batteries to other vehicle factories while supplying batteries for its own "BYD" brand new energy vehicles, while BYD will directly compete with other vehicle manufacturers in the market for new energy vehicles. How to sort out the relationship is as difficult as the question of "whose wife and mother fell into the water at the same time, who did you save first".

Ningde era, which focuses on the field of power batteries, has no such troubles. It has not yet entered the Ningde era of new energy vehicles, and has been driving in the field of power batteries, becoming a supplier of domestic and foreign automakers such as BMW, SAIC, Dongfeng and Yutong. For the first time last year, it surpassed Panasonic and BYD, ranking first in the world with 12GWh of power battery shipments. Since the beginning of this year, the Ningde era has newly added new customers such as Volkswagen, and recently announced the initial public offering of shares and the online subscription status and the winning rate on the GEM. After the listing, the Ningde era will use the power of capital to form a more intense competition with BYD in the field of power batteries. In the face of the raging Ningde era, there was a voice in the industry for Biandi’s sigh. Even the new energy car that once made BYD’s scenery incomparable has become a stumbling block. If you don’t develop new energy vehicles, you should go all out to power batteries. There will be no rapid rise in the Ningde era.

However, there is no such thing as if, and if the Ningde era and BYD were different development paths, who would win, it is not clear that this is the same as Android and Apple's two different systems. However, BYD's future to accelerate the expansion of power battery business, it is inevitable that both fish and bear a difficult situation. Spinning out the battery business would be a decision BYD would have to make, making the battery business relatively independent from new energy vehicles and responding more flexibly to the market.

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