Automotive lithium battery overcapacity concerns

Roland berger strategic consulting (RBSC) has released its latest research report on the global lithium ion battery market. Based on the recent sales of electrified vehicles, the company expects the global lithium ion battery market share to grow from $1.5 billion to nearly $10 billion by 2015. The report also drew public attention to the domestic lithium battery industry capacity.

In recent years, the domestic lithium battery industry has been warming up with the new energy automobile industry. Xinda securities lithium battery industry analyst hao ye said to our analysis, "the current lithium battery industry investment is indeed more excited. With China's dependence on oil resources rising further, there is no doubt that alternative energy sources such as lithium batteries have a bright future. According to data provided by sadie consulting, China's lithium battery capacity will grow further: with a series of investments, China's lithium battery capacity for power generation will reach 3.9 billion kilowatt-hours in 2015.

Zhao ying, a researcher at the institute of industrial economics of the Chinese academy of social sciences and an expert on new energy vehicles, said to us that at present, the new capacity of the domestic lithium battery industry is mainly in the assembly of this piece, but in the key materials, such as positive pole, negative pole, diaphragm and other aspects, there is not much. Zhao ying reminds: "domestic lithium battery manufacturers should expand the application scope, rather than blindly vertical expansion of capacity."

The associated effects of the great development of new energy vehicles

From the "new energy vehicle access management rules" implemented on November 1, 2007 to the report delivered by the premier at the government work conference on March 5 this year, various policies on new energy vehicles and the market expectations generated from these policies have been promoting the development of the lithium battery industry.

Driven by favorable policies, the country's lithium battery and related upstream and downstream industries ushered in an investment boom. At present, there are more than 200 anode materials enterprises in China, among which nearly 50 are above the scale. Wu hui, general manager of China electronic information industry development research institute, told China economic herald that in 2011, the global sales volume of cathode materials was 59,470 tons, and the domestic production reached 29,450 tons.

The hot pursuit of the capital market further aggravated the heat of the lithium battery industry. In recent years, A number of lithium battery enterprises have been listed in the a-share market, and created A first-day surge of about 186%, four consecutive trading days closed limit phenomenon. Data from cinda securities show that this year, the top of the list of several degrees of lithium battery concept shares occupied.

Data show that up to 2010, China's power lithium battery industry has a capacity of 2 billion ampere hours, mainly distributed in the pearl river delta, Yangtze river delta, northeast provinces and Beijing, tianjin and tangshan automobile industry clusters, among which the pearl river delta has a capacity of 700 million ampere hours, the Yangtze river delta, northeast provinces and Beijing, tianjin and tangshan have a capacity of 300 million ~ 400 million ampere hours.

Previously, Frost&Sullivan, a world-renowned consulting firm, released a report showing that by 2015, China's passenger vehicle EV/PHEV and electric commercial vehicle demand is around 120,000, requiring about 900 million ampere hours of lithium battery, accounting for only 23% of the current production capacity.

In addition to the driving effect of the new energy vehicle policy on lithium battery, the country's attitude towards the future battery development is also an important reason. On March 1 this year, the ministry of industry and information technology and the ministry of environmental protection jointly studied and drafted the "lead battery industry access conditions (draft)", which is also considered to be good for the lithium battery industry. Lead-acid batteries will lose market share to heavy pollution and short charging times.

Since the beginning of this year, more than a dozen domestic and foreign enterprises have invested in the research and development and production of lithium battery anode materials, and the production capacity is expected to be rapidly released. Zhao ying analysis said: "in the new energy vehicle industrialization is slow, lithium market application has not fully opened, the concentrated release of capacity will inevitably lead to excess.

The low-end trap behind overcapacity

In the case of immature technology and imperfect standards, the rapid release of battery capacity brings many worries.

In recent years, domestic enterprises involved in the field of new energy battery have mushroomed due to the huge market space. Not only foreign battery manufacturers have also been actively establishing joint ventures with domestic vehicle enterprises to lay out the field, but also private enterprises in shandong, henan, jiangsu and zhejiang provinces and guangdong have been very active.

Although a market with huge potential has emerged, the core materials of domestic lithium batteries are now heavily imported. Some materials show that the import dependence of Chinese battery membrane reaches over 80%, and the import dependence of lithium hexafluorophosphate, the core material of electrolyte, is as high as 80%~90%. Among the four core materials, only the positive and negative electrodes of the battery are localized. And the battery diaphragm only laboratory products, and foreign technology gap.

It is worth mentioning that just last year, saic inspected all the lithium battery factories in China and finally decided to cooperate with A123 of the United States, because there is almost no battery in China that can meet the demand of automobile.

Several listed companies in the field of lithium batteries, technical direction are different: rare earth high-tech use of issuing shares to raise funds for the first time in 1997 lithium nickel metal hydride battery project, Macao corun looking for nickel metal hydride battery materials from Toyota hybrid device supplier to ni-mh power battery finished product supplier, groupama Clarke, a subsidiary of citic guoan citic countries power supply technology co., LTD., the production of manganese acid lithium products as the anode material of power battery, has assembled during the Beijing Olympic Games to 50 pure electric bus, while jiangsu guotai, fluorine will mainly focus on lithium battery electrolyte.

It is understood that the yield rate of lithium battery that meets the requirements of electric vehicles should be between 60% and 70%. If the yield rate can reach more than 80%, it will be profitable. If the yield rate reaches about 90%, its gross profit can reach 40%.

Huang xuejie, a researcher at the institute of physics of the Chinese academy of sciences, said that China's electric vehicle battery research and development started early, and only more than 100 companies passed the test.

But regarding the lithium battery standard question, zhao ying expressed the different opinion. "Standards for lithium batteries are not uniform, nor can they be," he said. "Lithium batteries are used in a wide range of fields and can have different requirements for different fields.

Some industry experts also said that the current domestic battery plant low yield and equipment level. Most of the battery factory equipment level is not advanced enough, some of the new investment enterprises, the current equipment is basically imported from Japan and South Korea, although advanced, but technology accumulation and management can not keep up.

Multiple risks faced by enterprises

Zhao ying analysis said: "in the face of rapidly increasing excess capacity risk, lithium battery enterprises should change their thinking, should not focus on new energy vehicles. There should be a shift from economies of scale to economies of scope, with a focus on the needs of several industries.

By 2015, investment in lithium-ion batteries will still be well ahead. The lithium battery production base will be put into production within 3 years. lishen and Boston energy will start the construction of power lithium battery production base in chongqing in the near future. Wanxiang, lithium source, byd and other companies have announced capacity expansion plans.

Li zhongzhong, chairman of henan huanyu, a direct participant in the lithium battery industry, said that nickel-cadmium batteries were used in the early 1990s, nickel-hydride batteries in the mid-1990s and lithium batteries for mobile phone batteries in the late 1990s.

According to li, it is too early to tell whether there is excess capacity in domestic lithium batteries. Market competition will always eliminate the weak and make the strong stronger. According to li's prediction, there are nearly 300 lithium battery factories in China now, and there may be another 200 more in two years, but there may only be about 20 left in 10 years.

In addition to potential overcapacity, battery companies face technical risks. A123 batteries announced it will replace its lithium-ion battery modules and battery packs, Reuters reported. According to the company, the battery at the factory in livonia, Michigan, malfunctioned and one of the factory's four automatic welders failed to properly calibrate, resulting in a short circuit. The company estimates it will cost $55 million to replace the batteries.

"As a world-renowned supplier of lithium batteries for power, I think the recall of A123 batteries shows that lithium batteries are still some way away from a mature commercial operation. Xinda securities lithium battery industry analyst hao ye said to our analysis.

Cui dongshu, deputy secretary-general of the national passenger car market information association, also said that since it is impossible to speculate on the demand for lithium batteries in emerging industries such as new energy vehicles, related companies should not always expand production scale, but focus on steady development. "Scale is important, but technological breakthroughs are even more important."

Wu hui, deputy general manager of investment department of saidi consulting, said to us that battery manufacturers should increase their investment in technology research and development, especially in the recycling of lead-acid batteries, the improvement of lithium battery technology performance, and the research and development of new fuel cell technology. At the same time, battery enterprises should also strengthen the cooperation with scientific research institutes, to achieve a good docking.

In addition, lithium battery manufacturers may also face product price risk. Currently, the battery cost of electric vehicles is $800 ~ $1000 / KWH, accounting for 30% ~ 50% of the cost of ordinary electric vehicles. Bloomberg new energy analysts believe that short-term excess capacity and competition will drive down battery prices and improve the economics of electric vehicles, but will inevitably make life harder for small, single-business battery makers.

The analyst also said that in the short term, larger companies will be able to tolerate limited demand and compete by cutting prices, but smaller, single-business battery makers will have to compete for fewer supply contracts. The price of lithium-ion batteries is likely to fall rapidly.

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