What era will the power battery industry enter?

Recently, three heavy news such as boulders, shocked the power battery industry, triggered the industry continues to be widely discussed.

First, Jinshajiang Venture Capital will spend US$ 1 billion to purchase a total of 51 % of AESC' s equity from Nissan;

The second is the era of Ningde, the world's third-largest power battery maker, which was valued at Rmb80bn in the latest round of private equity financing.

BYD, the world's second-largest, and China's largest battery maker, will soon split its battery business into separate units, with lithium iron phosphate and lithium ternary batteries available to all car companies in the market.

As Shakespeare put it in The Storm: Everything that passes is a preface.

There are signs that in 2017, the "shuffle mode" of multiple causes will be opened, 90 % of companies will be out, and the power battery industry will leave the period of "barbarous growth" under the sand or will enter the "oligarchy era."

The new energy vehicle network for the in-depth analysis, only for the industry's reference.

Overcapacity is difficult to resolve

Overcapacity has been a chronic disease in the development of China's emerging industries in recent years. The most direct indicator of capacity utilization is capacity utilization, defined as the difference between actual production and optimal production capacity in a long-term equilibrium.

By 2015, China had sold more than 400,000 new energy vehicles, and in 2016 it produced 517,000 vehicles and sold 507,000 vehicles, an increase of 51.7 percent and 53 percent over the same period last year, respectively, according to the China Automobile Industry Association. China's new energy vehicles for two consecutive years of production and sales ranked first in the world. At the same time, the cumulative promotion volume exceeded 1 million vehicles, accounting for more than 50 % of the global market. China Automobile Association estimates that in 2017, China's new energy vehicle sales may reach 800,000 vehicles. In accordance with the goals set out in the 13th Five-Year Plan for the development of strategic emerging industries, by 2020, China will have produced and sold more than 2 million new energy vehicles in that year, with a total production and sales of more than 5 million vehicles.

Based on the new energy vehicle sales volume depends on the output of battery companies, in recent years, with the explosion of new energy vehicles, the power battery production capacity has also rapidly increased. Since 2015, power batteries have ushered in a large-scale expansion of production, such as traditional equipment manufacturers, new energy car companies, Internet giants and other multiple capital competing arrangements, in order to seize the opportunity in the rapidly developing market. In terms of capacity expansion, by the end of 2016, the new production capacity of the power battery industry had increased by nearly 35 GWh from the same period, which was almost three times the total shipment volume of the entire year two years ago. In 2016 alone, more than 100 billion yuan has been invested in power batteries.

In 2017, the pace of capacity expansion has not stopped. Companies that have joined the power cell have shown greater enthusiasm. Many power battery companies have already launched or plan to launch new production lines.

In the industry's view, if all of this capacity is released, the power battery capacity will reach 170 GWh per year. According to analysis by Wangzidong, director of the National 863 Electric Vehicle Special Power Battery Testing Center, according to the current power battery company's expansion plan, the total production capacity exceeds 170 Gwh/year, and the production capacity is already more than seven times the demand. Professor Ouyangming of Tsinghua University believes that "if the ratio of electric buses to electric passenger vehicles is 1:10 in the market, 170GWh can meet the total demand for 500,000 electric buses and 5 million electric passenger vehicles per year." According to the country's "13th Five-Year" new energy vehicle plan to 2020, it is predicted that the demand for power batteries in 2020 will be approximately 71.7 GWh, while the research report of Anxin Securities shows that the overall capacity of the power battery industry at the end of 2016 will exceed 80 GWh, and the demand is only 28GWh.

Obviously, the current domestic power battery capacity reserve growth has far exceeded the growth in sales. In addition, the tightening of subsidy policies, the rise in raw materials prices, and the pressure on the price of mainframes have caused the industry's cost space pressure to soar. Overcapacity may further increase.

Some analysts said that overcapacity has become the "nuclear threat" of China's power battery industry, and it is increasingly showing a trend of universality, severity and sustainability. Microscopically speaking, overcapacity will directly cause the deterioration of business operations; Macroscopically, a massive and sustained overcapacity could even trigger an industry crisis.

Some experts said that 2017 will enter the year of China's power battery shuffling, and it is inevitable that small and weak companies will be eliminated.

However, that is only one aspect of the problem.

Governance hope "white list"

On the other hand, as the authorities have increased their requirements for battery safety, quality, and performance, increasing the speed at which products and companies that fail to meet the standards are eliminated, it is expected that 90 % of battery companies will be eliminated, small and weak enterprises will be accelerated, and industry competition barriers will increase.

It is reported that the "Standard Conditions for the Automobile Power Battery Industry"(abbreviated as "Standard Conditions") has completed several rounds of consultation and will soon be officially announced. Compared with the 2015 version, the annual production capacity of lithium-ion power battery monomer enterprises in the revised version of the "Specification Conditions" has been increased from "no less than 200 million watt-hours" to "3 billion watt-hours to 5 billion watt-hours", which has increased by 15 times. At the same time, the standard conditions will increase the requirements for R&D and product performance. A 15-fold increase in new capacity would be disastrous for most companies.

As we all know, the domestic power battery industry is mixed, chaotic, to the point of non-governance. Earlier this year, Miaoxu, the Minister of Industry and Information Technology, said bluntly at the 100-person meeting of electric vehicles. "We have not achieved a revolutionary breakthrough in the core technology of power batteries, and performance needs to be greatly improved. The construction of charging infrastructure still needs to be accelerated. At the 100-person meeting, Miaoxu said that in the area of new energy passenger cars and trucks, there have been signs of structural excess, and the problem of insufficient power cell production at the high-end and low-end levels has further intensified. "Not only that, but also the low level of technology and the lack of battery standards are key problems in the power cell field. At the same time, there are also many problems such as low manufacturing acceptance rate, poor safety, and high cost. "

According to data released by the Higher Industrial Research Institute(GGII), the amount of new investment in power batteries has exceeded 100 billion yuan since 2015, and the number of domestic power battery companies has rapidly increased from about 50 at the end of 2014 to nearly 150 in 2016, an increase of nearly three times. Among the more than 100 new companies, there are traditional digital batteries that have been transformed, which have been extended from the upstream and downstream, and have also crossed from different fields such as real estate, steel, fire protection, and home appliances. Most of these companies are speculating for the purpose of quickly getting rich. There is not much technical strength at all. It is because of plagiarism and imitation that they are overbuilt, resulting in low-end overcapacity. In addition, overstating production capacity, blind expansion, low-cost competition and difficult to cure local protection, the power battery industry boom, heavy reefs, if not to take measures to clean up in time, the entire industry will face the danger of overturning.

In this case, the Ministry of Industry and Information Technology attacked heavily, and the forthcoming "standard conditions" are necessary to maintain the long-term stability of the industry.

Fangjianhua, president of Guoxuan Gaoke, said: "The standard condition is the white list issued to the entire vehicle company. Power battery companies value the significance of the white list. Under the current policy, the white list is one of the prerequisites for new energy vehicles to be subsidized(with this power cell). Among the two power battery companies or power battery products with the same performance, companies or products entering 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, Song Qiuling, 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 of the main engine factory. In the early stages of the development of new energy vehicles, the choice of car companies for supporting battery companies is still relatively scattered. So far, The main plant has gradually begun to cooperate with power battery companies in depth, gradually reducing the range of options for supporting power battery companies, and increasing investment in power battery fields. Enterprises or products entering the white list will become the "circle of friends" that the host plant will lock in.

Giant expands "new territory"

At present, the number of domestic power battery companies has rapidly increased from about 50 at the end of 2014 to nearly 150 in 2016, an increase of nearly three times. According to data, domestic power battery shipments in 2016 reached 28GWh, an increase of 79 % over the previous year. Among them, BYD, Ningde era, Woterma and Guoxuan Gaoke power battery shipments were 7.4 GWh, 6.7 GWh, 2.5 GWh and 1.86 GWh, respectively. The four companies alone account for 66 % of the domestic power cell market.

In 2017, the industry giants are making frequent moves to improve their quality and expand high-end production capacity. They are taking advantage of the "scale advantage + technology advantage" and coming to the fore. The "oligarchy era" may come.

Probably the biggest move was BYD. BYD, which won the world's new energy car sales championship in 2016, grew its power battery production rapidly. In the first half of 2016, it ranked second in global power battery manufacturers 'production, second only to Panasonic, which provided Tesla with power batteries. BYD, known for its lithium iron phosphate, shouted this year, "Electric? The slogan of the creation of the dynasty in the future is obvious in the ambition of "King" in the new energy market. BYD has always taken a closed vertical production mode, battery self-sufficiency, so that some of the active door to buy batteries of the vehicle factory eat a lot of closed doors. Recently, BYD began to reorganize and adjust the industrial chain, separate the power battery plate and supply other auto manufacturers.

As a strong competitor of BYD in China, the Ningde era has risen against the market through adjustment. In the Ningde era, with the legs of lithium iron phosphate and ternary lithium, they entered the “friend circle” of BMW, Geely, Beiqi, GAC and other car companies. Hyundai Motor Co., Ltd. also chose Ningde Times as the first Chinese battery supplier. In order to further enhance competitiveness, Ningde era also established two joint ventures with SAIC, and wants to complement the OEM industry to complement the entire industrial chain.

Woterma is also accelerating upstream and downstream companies to warm up. Woterma's innovation alliance has jointly seized the new energy car market with the entire industrial chain. There are now 34 cities that have signed agreements, aiming to sign the traditional car ownership of the contracting city in the next five years. 30 % of the new energy vehicles are replaced by the alliance.

At the same time, Zhuhai Yinlong and Geli are accelerating the layout of batteries, energy storage and new energy vehicles.

It can be predicted that the acceleration of innovation in battery technology, production capacity and business models of giant companies will restructure the industry pattern, increase the concentration of industry and brand, and will surely accelerate the promotion of the best and worst of China's power battery industry. Make the industry advantageous resources to the benchmark backbone enterprise converges, so as to really boost the industry future.

Looking around the world, on the one hand, Matsushita has firmly maintained its position as NO. 1 in the global power battery market through strategic cooperation with Tesla, followed by BYD. The Ningde era has surpassed LG Chemical as the third largest in the world, coupled with frequent attacks on local quality capital. The world's advanced battery technology was included in the package. For example, Zhuhai Yinlong had previously acquired a 53.6 % stake in AltairNano, a listed company in the United States, as early as July 2011, involving a total of 49 million US dollars(equivalent to about 325 million yuan). The fast charging technology, production line and sales system of lithium titanate negative electrode material are included in the bag. Recently, Jinshajiang Venture Capital spent 1 billion U.S. dollars to purchase a total 51 % stake in AESC from Nissan. These facts suggest that the Chinese power battery industry already has the power of the world, and that Chinese power is trying to change the global market landscape and dominate the world.

On the other hand, global power battery routes are complex, and various advanced technologies are emerging. Battery technologies with a range of more than 500 kilometers and a fast charge that can be achieved in 15 or 10 minutes are entering the market. Hydrogen fuel cells, known as the ultimate solution for new energy vehicles, are also being introduced to the market by Toyota, Honda and other car companies. In addition, graphene batteries are trying to get out of the laboratory and try to get closer to industrialization in terms of technology and cost.

Opportunities and challenges coexist, and the future is full of infinite possibilities.

New Energy Automobile Network firmly believes that China, as the world's largest new energy vehicle market, provides an excellent stage for local power battery technology innovation. In the era of global procurement, China's power battery industry is also expected to enter the global supply chain and create a global leader. The new energy car industry in China, which is carrying the mission of overtaking the curve of China's automotive industry, will also realize its dreams and surpass the future with the innovation and improvement of the core technology of power battery.

“The sea is flowing, and the hero is true.”

We have reason to believe that the power cell made in China will be "shocked by the world"!

The page contains the contents of the machine translation.