Battery industry SME capacity utilization rate is only 15%

Due to rising raw material costs, cathode materials currently account for half of the cost of power batteries. Normal should be around 30%-40%.

“The cost of nickel, cobalt and manganese has accounted for more than 90% of the cost of cathode materials, which is extremely abnormal.” General Manager of cathode material manufacturer Beijing Dangsheng Technology Co., Ltd. (hereinafter referred to as Dangsheng Technology) Jianzhong Li said.

According to industry data, in 2017, the price of electrolytic cobalt has more than doubled, the price of lithium carbonate has increased by more than 30%, and the cost of some types of ternary cathode materials has increased by nearly 50%.

The industry believes that the main reason for the decline in battery output growth is the decline in power battery prices caused by subsidies. The price of power batteries has dropped and the price of raw materials has been firm. The profit of battery companies will drop from the current 30% to 20%.

Industry data shows that last year, the average price of power batteries fell by 24% year-on-year, as of the end of last year, it has been as low as 1.4 Yuan / WH.

Therefore, battery companies have chosen to reduce production costs by further expanding production scale and expanding the industrial chain.

According to the capacity expansion plan proposed by the battery giants, it is expected that by 2020, the lithium battery capacity in Ningde era will increase from 17.09Gwh in 2017 to 50Gwh. In response to investor questions at the end of last year, BYD said that its power battery capacity will increase from 16Gwh in 2017 to 39Gwh in 2020. Tianjin lishen also plans to increase its production capacity to 30Gwh by 2020.

However, the expansion of battery capacity has also brought about a crisis of overcapacity. Liu Yanlong, secretary general of the China Chemical and Physical Power Industry Association, said that at the end of 2017, the capacity of power battery companies was about 140Gwh, up 36.61% year-on-year, of which the effective capacity was about 115Gwh, but the installed capacity was only 37Gwh, and the capacity utilization rate was only 35%. There is a risk of structural excess. It is expected that the utilization rate of power battery capacity will continue to decline further in 2018, and the medium and low-end production capacity will face elimination and integration.

In 2017, the Ningde era, which ranked first in terms of installed capacity, mentioned in the prospectus (updated version) published in March that the company's lithium battery capacity in 2017 was 17.08Gwh, the output was 12.91Gwh, and the capacity utilization rate was 75.54%. This figure has dropped by nearly 17 percentage points compared to 2016. In addition, the capacity utilization rate of the ternary precursor in the Ningde era was 97.12%.

According to industry data, the capacity utilization rate of second-line battery companies is 30%, and that of small and medium-sized battery factories is only about 15% or even less.

Yanlong Liu said that the first-line enterprises in the industry will gradually erode market share through technological advantages, and the low-end and medium-end production capacity will face the crisis of being eliminated. Hui Wu believes that by 2020, the number of power battery companies will drop from 90 in 2017 to 20.

Jianhua Fang, former president of Guoxuan Hi-Tech, also mentioned in an interview that the elimination rate of power battery companies will gradually accelerate. By 2020, more than 90% of power battery companies will be eliminated.

“It is very difficult to reduce the battery cost to 1.3 Yuan/WH or less.” Jianzhong Li said that with the large-scale production, the cost of battery technology is declining, but considering the high proportion of raw material costs, it is necessary for enterprises to solve the problem of raw material price concerned. "In the future, this cost may also depend on the possession of resources," he said.

The page contains the contents of the machine translation.