China's power battery market segment divided by three parties

With the continuous development of the new energy automobile industry, consumers have put forward higher requirements for new energy vehicles. In order to achieve the level of competition with traditional fuel vehicles, new energy vehicles have become a "thorny road" that must be experienced in industrial development to improve product quality and accelerate technological breakthroughs. As the "heart" of new energy vehicles, the power battery has become one of the important factors in the development of the industry.

Most of China's pure electric passenger vehicles continue to drive mileage <200km

At present, the technical level of China's power battery cells is almost the same as that of foreign countries. However, the technical and quality indicators of power battery systems are not far from those in foreign countries. On the one hand, the consistency of the power battery cells is poor, on the other hand, the battery PACK process is also lacking resulting in the quality of the battery system cannot meet expectations.

The lack of quality of the power battery system also makes the driving range of pure electric vehicles in China generally short. Especially in the low temperature environment, users often have “mileage worries”. Although the power battery technology has improved in the past two years, at present, the driving range of most pure electric passenger vehicles in China has not exceeded 200km, which cannot significantly alleviate the “mileage worry”.

Multiple segments help accelerate technological breakthroughs

At present, China's power battery PACK market pattern is divided by the host factory, battery factory, third-party PACK Company. Among them, the OEM has accounted for more than half of the market share of the passenger vehicle market, while the battery factory has an absolute dominant position in the special-purpose vehicles and buses. Although the third-party PACK companies have a certain share, the proportion is not high.

Can subdivided power battery systems accelerate technological advancement?

In the future, the power battery system business will gradually be split by the OEM, and its technology will be clearer. Structural parts, battery packs, modules, BMS (battery management systems), high-voltage power distribution, etc., are likely to form different market segments.

Taking the BMS market segment as an example, in 2016, independent domestic third-party BMS companies dominated, accounting for 43% of the market. Several power battery companies and vehicle companies located in the “first echelon”, as well as some PACK companies have the R&D capabilities of BMS, but their market share cannot be compared with third-party BMS companies.

Can subdivided power battery systems accelerate technological advancement?

China's power battery PACK market pattern is divided by three parties

In fact, once a multi-segment market is formed, it will break the original market structure, so that enterprises that specialize in a certain segment and have certain technology accumulation can develop rapidly, and more capital can be invested in R&D to accelerate the segmentation technological advances. Moreover, large and comprehensive enterprises are constrained by factors such as assets and equipment, and lack flexibility to cope with the rapidly iterative market environment. In the process of transformation and upgrading, enterprises in the segmentation field will be more market-savvy than large and comprehensive enterprises, and it is easy to seize the opportunity of development.

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