Power Battery Patterns: Intensifying Industry Competition under Policy Motivation

As one of the development directions of the automobile industry, the new energy automobile has been highly valued by the country. The development of new energy vehicles is an important way for China to move from a big car country to a big car country. As the core components of new energy vehicles, power batteries have also been hot. In recent years, with the influx of capital into the power battery field, the industry has intensified competition.

Increased industry competition driven by policy

In recent years, the overall production capacity of the power battery industry in China has expanded rapidly, especially since 2017. With the adjustment of the state's subsidy policy on electric vehicles and the full release of power battery production capacity in the industry, at the same time, With the implementation of policies such as double points and new energy vehicles, the new energy car market will continue to develop further.

It is expected that the demand for power batteries from 2018 to 2020 will continue to grow at a rate of 30 to 40. After many years of research and development investment and technological accumulation, the comprehensive performance of lithium-ion batteries and electric motors in China has been continuously improved, the technology has become mature, and the cost has continued to decline. It has reached the international advanced level in some performance indicators, and has become the mainstream choice for power assemblies for new energy vehicles at this stage. It is generally used in the field of electric vehicles.

Revenue growth was positive in 11 of the 13 power battery listed companies in 2017, reflecting the booming integration industry. Among them, Kennedy Energy grew 152.9 <UNK>, Lions Technology revenue increased 92.07 <UNK>, and Penghui Energy increased 65.06 <UNK>.

With the development of recent years, the domestic power battery industry has gradually appeared overcapacity situation, product prices show a downward trend. In particular, all types of capital have entered the market related to new energy vehicles and power batteries. The rapid expansion of production capacity has brought about excess production capacity in the low-end market, and the market competition has become more fierce. As competition intensifies, industrial concentration is also increasing. According to the data, in 2017, the total installed capacity of new energy automotive power batteries in China was about 36.4 GWh, of which the total installed total power of the top ten power battery companies reached 26.81 GWh, accounting for 74 percent of the total. Top power battery makers have dominated the market.

While revenues have grown, the profits of power cell companies in 2017 are not as good as revenues. Net profits fell in seven of the 11 companies. This is mainly due to the impact of the new energy vehicle subsidy policy, the cost of the vehicle factory pressure conduction, coupled with the rise of upstream raw materials, reduced the profits of power battery companies.

Deepening the layout and enhancing core competitiveness

The new energy powered car industry is obviously influenced by the national policy orientation, and the future development direction and policy support are being adjusted. On February 13, the four ministries and commissions jointly issued the "Notice on Adjusting and Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles." The new subsidy policy leads to the development of new energy vehicles with high mileage and high energy density. Lithium-powered batteries with high-performance products will usher in broad market space.

With the introduction of the new policy on subsidies for new energy vehicles in 2018, the increase in the energy density of power batteries and the increase in the mileage of new energy vehicles will force companies to upgrade their core technologies, which will help the long-term development of the entire industry. At the same time, it will also lead to a further increase in market concentration. The new energy car market is expected to change in 2018.

Faced with this kind of policy orientation, power battery companies have deepened the layout of power battery core technology. For example, Yiwei Lithium can actively do a good job in research and development of new products and technology reserves in line with the development trend of the industry. At the end of 2017, Square iron phosphate batteries, cylindrical ternary batteries and soft package ternary batteries were built. In 2018, the company will continue to expand its production capacity and add square three-way battery production capacity to meet the company's needs in the passenger car, special car and passenger car market and energy storage market. Guo Xuan Gao Ke said that the company focuses on the research and development investment of power lithium batteries, further improved the research and development system of the five major research institutes in the world, strengthened the analysis and characterization of the battery's entire life cycle system from the space and time dimensions, and laid the foundation for product design, development and verification. In 2017, the industrialization of the new-generation Sanyuan 622 square aluminum shell battery and the research and development project of Sanyuan 811 battery and soft-pack battery products made important progress.

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