Development Status and Trend Analysis of Power Battery Industry

The only constant in the world is “change”. This philosophical proposition shows the absoluteness and uncertainty of change under the law of time. It has a long-term gradual change of the sea, and a short blast and rainbow alternates the mutation that was staged.

The rise and evolution of emerging industries, compared with traditional industries, "change" has become the symbol of the label and industry of the times.

This point has undoubtedly been strongly supported in the new energy automobile industry.

At present, in the power battery industry has 150 large and small enterprises, including at least 30 companies to be a partner of car companies for a long time, and have the latest data show that Ningde era, Watmar, Guoxuan Hi-Tech, Beijing Guoneng, Yiwei Lithium several large battery companies supply car companies customers have covered 80% of the domestic passenger car companies.

It can be said with certainty that in 2017, the process of survival of the fittest and restructuring of China's power battery industry is accelerating, and it is increasingly showing a trend of increasing brand concentration, obvious market stratification, and accelerated echelon differentiation.

So, what does this trend presage? What impact will it have on the new energy bus industry and the power battery industry?

The new energy vehicle network provides a brief analysis of this and is for industry reference only.

"Winners take all" giants cover 80% of car companies

In 2016, the bus companies that sold more than 10,000 new passenger buses in China's bus companies were mainly Yutong buses (26,862 vehicles), Zhongtong buses (14,105 vehicles), BYD (13,278 vehicles), and the rest were Suzhou Jinlong, Jinlv, Beiqi Foton, Nanjing Jinlong. Sales of several car companies such as Ankai Bus, Zhongche Times and Zhuhai Yinlong ranked first.

In addition to BYD's pure electric bus battery, the company has external procurement. Therefore, the above-mentioned major bus companies have also become the target of many battery companies.

According to statistics, in the battery assembly of new energy buses, the number of assembled battery companies accounted for more than 50%. This can be seen from the recent batches of announcements and recommended catalogues. Although more than 30 battery companies in each batch of announcements and catalogues participate in the package, most of the models are concentrated in a few battery companies.

The facts show that the battery assembly of passenger cars in China is tilting toward a few large battery companies, and the concentration of supply chain is increasing.

For example, in the 295 batch announcements that have been announced, there are 265 new energy buses and chassis, and 137 pure electric buses. More than 30 batteries are on the bus models. Among the top five battery companies in terms of number of models are Ningde era (57 models), Beijing Guoneng (30 models), Watmar (20 models), Guoxuan Hi-Tech (21 models), and Yiwei Lithium (17 models), it can be seen that the total number of these five total configurations has reached 145, accounting for 55% of the total number of new energy buses.

Among the 296 batches of announcements, 23 of the 159 pure electric bus models were selected as battery suppliers. The top five battery companies had a total of 94 models, accounting for 59% of the total number of pure electric buses.

The same situation has appeared in several batches of recommended catalogues. For example, in the newly released fourth batch of recommended catalogues, a total of 224 pure electric bus models were released, of which the top five battery companies assembled as many as 145 models more than 64.7%.

In the third batch of catalogues, the top five battery companies assembled 257 passenger cars, accounting for 56.9% of the total number of new energy buses.

Combined with the previous batches of recommended catalogues and announcements, several battery companies ranked first in the number of pure electric bus assembly are stable, mainly in Ningde era, Beijing Guoneng, Watmar, Guoxuan Hi-Tech, Yiwei Lithium, Weihong a few companies such as Power.

Judging from the batch of announcements and catalogue statistics, the battery support of these large bus companies is basically provided by the top battery companies.

For example, the batteries of Yutong Bus, the largest passenger car company in China, are supplied by Ningde Times. Zhongtong Bus battery suppliers include Ningde Times, Waterma, Guoxuan Hi-Tech, Weihong Power, etc.; Nanjing Jinlong's battery suppliers include Ningde Times, Waterma, Guoxuan Hi-Tech, Yiwei Lithium Energy, etc.

It is also worth noting that the above-mentioned battery companies are not limited to large passenger car companies. The car enterprises they supply already cover 80% of domestic bus companies.

For example, in the fourth batch of catalogues, customers in Ningde era not only have the top-ranking automakers such as Yutong, Zhongtong, Jinlong, Jinlv, Nanjing Jinlong, etc., but also Jinhua Youth Bus, Shanghai Vientiane, Shangrao. Bus, Shandong Haoxing, Dongguan Zhongqi HongYuan, Guangxi Yuanzheng Bus, Chengdu Bus, Yunnan Wulong Automobile, Jiangling Jingma and many other enterprises.

In addition, in the third batch of recommended catalogues, the Ningde era also entered the supply chain of enterprises such as North Waldney Olympus Bus, Dandong Huanghai, Shanghai Vientiane, Fujian Xinfuda and Chengdu Bus.

Matthew effect "white list" boost the strong constant strength

With the upcoming release of the "Regulations on the Standards of Automotive Power Battery Industry" (referred to as "Standard Conditions"), the requirements of the competent departments for battery safety, quality and performance have increased, which has intensified the speed at which products and enterprises that fail to meet the standards have been eliminated. Weak and small enterprises are hard to escape from the bad news, and the industry's competition barriers will be higher and higher.

It is reported that "Automobile Power Battery Industry Standard Conditions" (referred to as "Standard Conditions") has completed many rounds of solicitation opinions and will be officially announced soon. Compared with the 2015 version, the revised version of the "Regulations" will increase the annual production capacity of lithium-ion power battery cells from "not less than 200 million watt-hours" to "30 billion watt-hours to 5 billion watt-hours" , increased by 15 times. At the same time, the regulatory conditions will increase the requirements for research and development and product performance. The 15 times increase in new capacity requirements is a catastrophe for most SMEs.

As is known to all, at present, the domestic power battery industry is mixed and chaotic, and it has reached the point where it cannot be controlled. At the beginning of this year, Miao Wei, Minister of the Ministry of Industry and Information Technology, bluntly said at the 100-person meeting of electric vehicles. "The core technology of our power battery has not yet achieved a revolutionary breakthrough, and the performance needs to be greatly improved. The construction of charging infrastructure still needs to be accelerated." At the meeting, Miao Wei said that in the field of new energy buses and trucks, there have been structural surpluses, and the problem of insufficient high-end capacity of power batteries and overcapacity of low-end products has been further aggravated. "Besides, the key issues in the field of power batteries are the low level of technology and the lack of battery standards. At the same time, there are many problems such as low manufacturing yield, poor safety, and high cost."

According to data released by the Higher Industrial Research Institute (GGII), since 2015, the amount of new investment in the field of power batteries has exceeded 100 billion Yuan, and the number of domestic power battery companies has increased rapidly from 50 at the end of 2014. Nearly 150 in 2016, the growth rate is nearly three times. Among the more than 100 new enterprises, there are traditional digital battery transformations, which are extended from the upstream and downstream, and also from different fields such as real estate, steel, fire protection and home appliances. Most of these enterprises have the purpose of speculation to get rich quickly. There is not much technical strength at all. It is precisely because of plagiarism and imitation, resulting in low-end overcapacity. In addition, false reporting of production capacity, blind expansion, low-cost competition and intractable places to protect chronic diseases, the power battery industry boom, dense reefs, if not timely measures to clean up, the entire industry will face the risk of overturning.

Under this circumstance, the Ministry of Industry and Information Technology has made a heavy blow, and the forthcoming "Regulations" are necessary to maintain the long-term stability of the industry.

Jianhua Fang, former president of Guoxuan Hi-Tech, said that “the standard condition is a white list for vehicle manufacturers.” Power battery companies value the white list. According to the current policy, (power battery companies) entering the white list is one of the prerequisites for subsidies for new energy vehicles (with this power battery). In two power battery companies or power battery products with the same performance, companies or products that enter the white list will be more likely to be purchased by new energy vehicle companies.

According to the new energy vehicle network, the forthcoming "Regulations" have raised the requirements for R&D and power battery performance. In a forum, Qiuling Song, deputy director of the Department of Economic Construction of the Ministry of Finance, said that “new energy auto subsidy new policy” strengthens support for power batteries. In passenger cars and special vehicles, the technical indicators of the power battery have been specially added, and the subsidy mode of the new energy bus has been adjusted to take the power battery as the core, the battery capacity and the battery performance as the standards, and more objectively reflect the production cost and technical level of the vehicle."

From the perspective of customers, power batteries are the core components of new energy vehicles. At present, cost reduction and technological innovation have become the most concerned issues for OEMs. If it is said that in the early stage of the development of new energy vehicles, the choice of vehicle companies for supporting battery companies is still relatively scattered. So far, the OEMs have begun to gradually cooperate with power battery companies, gradually narrowing the selection range of supporting power battery companies and increasing for the investment in the field of power battery, the enterprises or products that enter the white list will become the “friend circle” that the OEM will give priority to.

Since 2017, not only large passenger car companies, but also a large number of small and medium-sized bus companies have accelerated the launch of new energy bus models, and have gathered announcements and recommended catalogues. These small and medium-sized bus companies are also inclined to choose technology, capital strength and production capacity large battery company.

It can be predicted that benchmarking enterprises will speed up innovation in battery technology, production capacity and business model, and will restructure the industry, increase industry concentration and brand concentration, and will accelerate the promotion of the survival of the fittest in China's power battery industry. Resources are pooled by benchmarking companies to truly boost the future of the industry.

The orderly and sustainable development of the power battery industry is worth looking forward to.

The page contains the contents of the machine translation.