About the Current Situation and Development Trend of Power Battery Overcapacity

Overcapacity of power cells is likely to worsen.

On November 16, 2017, Liuyanlong, Secretary-General of the China Chemical and Physical Power Industry Association, put forward the above views at the second International Summit on Power Battery Applications.

Power cells provide power sources for tools, including lithium iron phosphate batteries, ternary power cells, and lead-acid batteries.

"The development of the entire industry is now in a good state, and news of restructuring cooperation and investment and financing is constantly coming out. According to our statistics, in the first half of the year, the investment in projects related to the lithium ion battery industry exceeded 120 billion yuan. "Liuyanlong said.

At the same time, the increased inventory of power batteries is also putting pressure on battery companies. "According to preliminary statistics on major companies, domestic power cell production totaled 31.5 GWh in the first three quarters, but the installed capacity of various new energy vehicles was about 14.7 GWh. " said Liuyanlong.

According to data from the Institute of Lithium Power Research and Production(GGII), among the existing inventory types, lithium iron phosphate batteries are more than ternary materials, and lithium iron phosphate has greater inventory pressure.

Affected by inventory, some battery companies face more severe account period and receivable pressure, so asset impairment losses have increased significantly from the beginning of the period. According to data collected by GGII, the inventory of lithium battery plates in the first half of 2017 reached 13.165 billion yuan, an increase of 137 % year-on-year; The total amount of accounts receivable was 24.771 billion yuan, an increase of 133 % year-on-year.

鈥淭he industry is so competitive that many companies have to sell at a price, and the pressure on the capital goes beyond the industry and is bound to have serious consequences. "Liuyandong said.

Although the problems of high inventory for battery companies have emerged, the impact of excess power battery capacity has not yet been fully demonstrated.

At the end of 2016, the Ministry of Industry and Information Technology issued the "Standard Conditions for the Automobile Power Battery Industry(2017)"(Consultation Draft) to significantly increase the scale of production capacity of power battery companies, of which the capacity requirements of power battery companies have increased by 40 times to 8GWh. After the draft published, a large number of power battery companies have proposed plans to expand production this year, including a large number of battery companies.

Tianjin lishen battery Co., Ltd. started construction of 2GWh power battery base in Qingdao, Hefei Guoxuan Gaoke Power Energy Co., Ltd. started construction of an annual 3GWh power battery and supporting projects in Anhui Lancang, Shenzhen Bic Battery Co., Ltd. in Shandong Jining New Energy Automobile Industrial Park has also been signed. It contains an 8Gw power battery production project.

Mr Liuyanlong said the overall power cell capacity was expected to reach 228 billion watt-hours by the end of 2017, up 125 per cent from last year.

In 2016, China's sales revenue of lithium-ion batteries reached 133 billion yuan, up 35 % from 2015. Among them, according to statistics from the China Chemical and Physical Power Industry Association, the sales revenue of powered lithium ion batteries was 60 billion yuan, an increase of 88 % year-on-year, and the output was 33 billion watt-hours.

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