Market Analysis of Power Battery -- Formation of Big4 Oligarchy

The power battery PACK product consists of three parts, namely the battery module, BMS, and the fixed frame housing. The process includes the process of core assembly, welding, semi-finished product testing, labelling, and packing.

The power battery PACK system uses a mechanical structure to connect a large number of individual cores in series in parallel, and considers problems such as system mechanical strength, heat management, and BMS matching. As a key step in the production, design and application of power battery systems, PACK has a cost ratio of about 35 <UNK>. It is the core link connecting upstream core production and downstream vehicle use, and requires a large number of mature technologies to intersect and collaborate with each other. Its main technologies include customized development technology for battery management systems, heat management technology, current control and detection technology, module assembly design technology, aluminum alloy power battery outer box casting technology, and computer virtual development technology.

Global Power Battery Market Size

The demand for power batteries is driven by the two-wheel drive of the lower reaches of new energy vehicles and the increase of bicycle load. The market demand in the future will usher in rapid growth.

(1) Global Market: We estimate the demand for power batteries in 2018, 2020 and 2025 to be 88GWh, 205GWh, and 583GWh, respectively, of which the CAGRR for 2018-2020 is about 33 <UNK>. It is expected that the market size will exceed 120 billion in 2018, grow to 215.3 billion in 2020, and CAGR will be about 2.1 billion in three years.

(2) Domestic market: We estimate the demand for power batteries in 2018, 2020 and 2025 to be 47 GWh, 97 GWh, and 270 GWh, respectively, of which the CAGR for 2018-2020 is about 27 <UNK>. It is expected that the size of the Chinese market will exceed 66 billion in 2018 and increase to 101.9 billion in 2020.

China Power Battery Demand

In recent years, with the promotion and application of new energy vehicles, the power battery market has also been rapidly developed. According to the "Analysis Report on the Development Prospects of Power Battery PACK Industry Development and Investment Strategic Planning" released by the forward-looking Industrial Research Institute, the demand for power battery in China reached 28GWh in 2016, and the effective production capacity of the entire industry was about 56GWh, and the capacity utilization rate was about 50. The China Institute of Business and Industry predicts that China's electricity battery demand will reach about 31.3 GWh in 2017. By 2018, China's demand for power batteries will exceed 50GWh.

Power cell industry is becoming clearer

According to data from the forward-looking Industrial Research Institute, as of the end of 2017, the total domestic power battery production capacity reached 135GWh, and the effective production capacity was 110 GWh, while the annual power battery shipment volume was only 36.2 GWh, and the average capacity utilization rate was less than 40 <UNK>. The capacity utilization rate of leading enterprises can reach 80 <UNK> estimates, and the capacity utilization rate of some small and medium-sized enterprises is only 10 <UNK>, and the low-end excess capacity is obvious.

In the next two years, first-line battery manufacturers will still have new production capacity. It is expected that the total power battery production capacity in 2018 and 2020 will reach 206 GWh and 285 GWh, respectively. In the same period, the demand for power batteries will be 47 GWh and 97 GWh, respectively. Technical backwardness, lack of stable vehicle customers small production capacity will be eliminated.

Distribution of China Power Battery Market Share

Among the power battery manufacturers, BYD and CATL shipped 7.35 GWh and 6.72 GWh respectively in 2016, and their combined market share reached 50.2 <UNK>. The market share of Womate and Guoxuan Gaoke was also 8.9 and 6.6 respectively. The number of power battery shipments in 2016 was less than 1GH. The total market share of the top 10 companies reached 79, and the market concentration was high.

Above 200 GWh in 2020, Big4 oligarchy formed

In 2020, the power battery market will be above 200 GWh, and CATL, LG, Samsung, and Panasonic will become Big4 worldwide. The CATL market is mainly in China; LG and Samsung are mainly in Europe and the United States; The Panasonic market is mainly Tesla. In the semi-finals, CATL, Panasonic, LG, and Samsung are expected to be ranked in order of share.

Marketization

In recent years, thanks to the promotion of the National industrial policy, the power battery industry has developed rapidly. With the implementation of the new points policy, the impact of the improvement of lithium battery production technology, the reduction of manufacturing costs, and the popularization of charging facilities will be further deepened. The lithium ion power battery industry will still maintain rapid development and the degree of marketization will gradually increase.

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