Volkswagen increases investment in lithium batteries, demonstrating the determination of electrification

Event

According to foreign media reports, according to the previous plan of the Volkswagen Group, it is not until 2019 that large-scale electric vehicle products will be introduced to the market. But now Volkswagen has begun to prepare for the supply of battery components in order to meet the large-scale production needs of next year. After announcing the signing of a $25 billion battery purchase contract, it recently announced that it has doubled the contract amount to $48 billion.

Review

Volkswagen increased investment in lithium batteries, demonstrating the determination of electrification. Volkswagen announced the "Road map E" production plan in 2017, plans to produce 3 million electric cars per year by 2025 and launch 80 new electric car models. To this end, Volkswagen announced a battery investment plan of up to 48 billion US dollars this year. The Volkswagen model will mainly focus on purchasing third-party batteries. Although it does not disclose any specific contract details, it is expected that companies that cooperate with Volkswagen may It is LG Chem, Samsung SDI, Panasonic or CATL. Such a large-scale cooperation will drive the development of the global lithium battery industry. We believe that the electrification trend is irreversible and the industry has a broad prospect.

Lithium-ion equipment is still expected to benefit from the global trend of electrification. 1) National memory market: At present, the industry's estimated production capacity has exceeded 100Gwh, and the installed capacity in 2017 is 36Gwh. There is a relatively obvious surplus situation, but the capacity utilization rate of leading companies is still high. We expect that this future will be the leading differentiation and the strong constant strong, leading lithium electrical equipment factory is expected to benefit from the leading market share increase. 2) New domestic market: We believe that lithium battery equipment will still have an explosive situation. This opportunity is mainly due to the emergence of joint venture car manufacturers. In February 2018, Great Wall and BMW established a joint venture, and the two sides will cooperate in the field of new energy vehicles to form a joint venture to produce MINI brand electric vehicles. This is followed by Volkswagen and Jianghuai, Dalem Group and BAIC Group, and Ford Motor Company last year. After the Zhongtai Automobile, Nissan and Dongfeng Group, another international giant is cooperating with domestic automakers, mainly in response to the huge pressure of new energy double points. As the time of the double-point policy gradually approached, this type of car business frequently. Such a joint venture car factory supply chain remodeling process will provide opportunities for domestic battery manufacturers. After the battery leading enterprise CATL has cut into the Volkswagen MEB platform, it signed a strategic cooperation letter of intent with Jaguar Land Rover on April 25th. We expect that the domestic first-class national core manufacturers will benefit significantly, and the equipment leader also has great flexibility. 3) Overseas market: Under the global trend, the expansion of overseas battery manufacturers is also expected to accelerate. LG Japan, China, and the United States will increase production at the same time. The investment is estimated to be tens of billions of yen or more, and Samsung SDI will invest 1 trillion won. (5.8 billion Yuan) expansion of batteries, LG Chemical invested 1.5 trillion (8.7 billion Yuan) won.

Investment suggestion: Under the trend of certainty of electrification, we are optimistic about the future development of lithium battery equipment, especially leading companies with domestic and overseas quality customers. It is recommended to focus on Pioneer Intelligence, Wintech, Keheng, Xingyun, Jinyinhe, etc. .

Risk warning: The progress of the industry is not as good as expected.

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