In 2018, China's power lithium battery production capacity will reach 182 GWH

CR10 companies 'strategic planning, technical routes, and production capacity deployment have fully demonstrated the strength of capital and market expansion to promote the formation of industry patterns. Maintain the industry's increased rating. The square has become the mainstream, and the ratio of soft packages has rapidly increased. By the end of 2018, the total production capacity of the entire industry will reach 182 GWH. According to our industry analysis, the square production capacity will reach 93.5 GWh, the cylindrical production capacity 50.5 GWh, and the soft package production capacity will reach 38 GWh, accounting for 51 %, 28 %, and 21 % respectively.

1 The square production capacity accounts for half of the total, which has become the most important technical route. The growth rate of production capacity expansion has reached 36 %. The production capacity of square enterprises is mainly concentrated in CATL, BYD, Guoxuan, and Lishen. Only these four production capacities reached a total of 71.5 GWh in 2018. The proportion was as high as 85.6 %, an increase of 4 percentage points year-on-year.

2 Cylinders are undergoing technical upgrades. The original production capacity of the cylindrical factory is the highest, and its main force of expansion is changing from 18650 to 21700. The overall growth rate has slowed down.

3 Soft pack batteries have risen rapidly with high energy density, but due to the high technical threshold and the large difference in the technical principles of squares and columns, the expansion is mainly concentrated in soft pack leading enterprises such as Fu-Neng shares, and the overall production capacity is 38 GWh. Among them, the production capacity of Fu Neng, Guo Neng, and Kanai reached about 13 GWh / 13 GWh / 5.8 GWh, respectively, accounting for nearly 1 point increase compared with the previous year. The effect of industrial clusters has been highlighted. Companies represented by CATL, Guoxuan, BYD, Lishen and other giants, through comparing the production capacity and technology research and development of more than 10 power battery companies in the domestic mainstream, are strengthening their technology research and development. On the other hand, strengthen the base production capacity of the car company, reduce the transportation radius and effectively reduce costs, and create a tight production capacity supply.

Industrial clusters have laid the foundation for the market, and the future industrial competition will win among well-deployed enterprises. Lithium-electric industrial cluster base and around the supporting construction of the car factory is under way. Beiqi Supply Chain: CATL, Guoxuan Gaoke, Fueneng Technology, Pulder and others. Beiqi New Energy Vehicle Manufacturing Base is Daxing Caiyu Town, and Pulder is the core pack supplier and is in an industrial zone. Fufu, the battery company that currently enters the supply system, can invest in the production of power lithium batteries in Shunyi District, closely surrounding the production capacity supply of Beiqi New Energy. Others such as CATL and SAIC are also actively reducing the transportation distance and accelerating the expansion of production.

1. The total amount has rapidly expanded, and the leader has stepped up the deployment of lithium head production capacity. The main pattern has highlighted that the leading expansion competition has passed the half way. The competitiveness of the head company is outstanding, and the industry has maintained an increased rating. We believe that the main battlefield of power lithium batteries will focus on the top ten or so power lithium battery companies. The strategic planning, production capacity deployment and supporting base construction of the CR10 enterprise lithium-electric enterprises not only reflect its capital strength and market expansion strength, but also predict the acceleration of the formation of the lithium-electric industry pattern. By comparing the production capacity and technology research and development of more than 10 power battery companies in the domestic mainstream, we think that the effect of industrial clusters has been highlighted. Industrial clusters have laid the foundation for the market, and future industrial competition will win in the well-deployed head companies.

Increased industry concentration accelerates the value of the head company and maintains the industry recommendation rating. Head production capacity has increased, and the living space of small and medium-sized enterprises has continued to be under pressure. In the past 17 years, the expansion of power battery leader production led by Ningde era and BYD was higher than the industry average, and CATL(17 GWh), BYD(16 GWh), and Guoxuan Gaoke(10 GWh) continued to rank in the top three. Yi-Wei Li-Neng, Beijing Guoeng, FuNeng Technology, and Tianjin Li-Shen followed, which led to a further increase in industry concentration. The CR10 index for the power lithium battery industry rose from 44 % in 2016 to more than 52 % in 2017. The top ten installed capacity in the first quarter of the current 18 years are CATL, Guoxuan Gaoke, BYD, Bic Battery, Far East Foster, Guoeng Battery, Wanxiang, Zhihang New Energy, Haguangyu Technology, and Wang Jianyu.

The passive expansion of production capacity is nearing its end. The average production capacity of 41 % of small and medium-sized enterprises is about 2.5 GWh, which further widens the gap with large companies. Judging from the capital expenditure of companies such as Shunchang, Far East Foster, and Nandu Power, there is basically no plan to continue to invest, and the 17-year investment is not as good as the previous planning goal. With the rapid increase in the concentration of production capacity, small and medium-sized enterprises are limited by the reserves of funds and technicians, and production capacity development tends to stagnate rationally. It is relatively conservative in terms of overall production capacity planning. The current expansion of production capacity is not limited to the local government resources of the company. It is more than the deployment within the transportation radius centered on the customer of the company for supporting projects.

2. The technical route is fully spread: the square has become the mainstream, and the soft package ratio has rapidly increased. In 2017, the capacity of the square, cylindrical, and soft pack batteries reached 68.5 GWh, 63 GWh, and 23 GWh, respectively, accounting for 45 %, 41 %, and 15 % respectively. By the end of 2018, the total production capacity of the entire industry will reach 182 GWH. According to our industry analysis, the square production capacity will reach 93.5 GWh, the cylindrical production capacity 50.5 GWh, and the soft package production capacity will reach 38 GWh, accounting for 51 %, 28 %, and 21 % respectively. In terms of trends:

1 The square production capacity accounts for half of the total, which has become the most important technical route. The growth rate of production capacity expansion has reached 36 %. The production capacity of square enterprises is mainly concentrated in CATL, BYD, Guoxuan, and Lishen. Only these four production capacities reached a total of 71.5 GWh in 2018. The proportion was as high as 85.6 %, an increase of 4 percentage points year-on-year. The large expansion of these companies is the main driver of the high growth rate of the square as a whole.

Our analysis suggests that this is mainly due to the fierce competition among cylindrical enterprises, which are currently undergoing technological upgrading, and that the original production capacity of cylindrical factories is the highest, with the main force of their expansion shifting from 1,8650 to 21700. Overall growth has slowed.

3 Soft pack batteries have risen rapidly with high energy density, but due to the high technical threshold and the large difference in the technical principles of squares and columns, the expansion is mainly concentrated in soft pack leading enterprises such as Fu-Neng shares, and the overall production capacity is 38 GWh. Among them, the production capacity of Fu Neng, Guo Neng, and Kanai reached about 13 GWh/13 GWh/5.8 GWh, respectively.

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