Is there any excess capacity of power lithium battery industry?

First, industry status quo

(1) Industrial overcapacity has emerged

In 2017, China's new energy vehicles sold 777,000 units. It is expected that China's new energy vehicle sales will exceed one million units in 2018. The fast-growing new energy vehicles have also stimulated the rapid development of the power battery market. The data shows that in 2017, the total installed capacity of China's new energy vehicle (EV+PHEV) power battery is about 36.24GWh, which is 29.4% higher than the 28GWh data in 2016. The fast-growing market has also brought many problems to the development of the power battery industry. On the one hand, the problem of overcapacity began to emerge. In 2017, China's power battery installed capacity was only 36.24GWh. In fact, China's power battery production in 2017 was 44.5GWh. Therefore, the overall inventory of power batteries in 2017 accounted for 18.7% of the total output.

lithium iron phosphate batteries will face more severe overcapacity problems in the next 1-2 years, and ternary lithium batteries will have staged overcapacity.

(2) The price of raw materials is rising, and the cost of enterprises is high.

In 2017, the price of electrolytic cobalt more than doubled, the price of lithium carbonate rose more than 30%, and the cost of some types of ternary cathode materials increased by nearly 50%.

According to institutional data, the output value of China's power battery reached 72.5 billion Yuan in 2017, a year-on-year increase of 12%, much lower than the growth rate of more than 60% in 2016. However, the output value of the four key materials of China's power battery (positive electrode material, anode material, separator and electrolyte) reached 61 billion Yuan in 2017, a year-on-year increase of 62%. Among them, the output value of cathode materials accounted for the largest proportion, reaching 71.5%, and its output value increased the most.

Battery main causes of the decline in output value increase subsidies power battery prices decline caused by falling. Power battery prices fall and the strength of the price of raw materials, the gross profit of the enterprise, will further compress battery dropped from the current 30% to 30%.

Industry data show that in 2017, the average price of power battery fell 24% year on year, by the end of 2017, has been as low as 1.4 Yuan/wh.

At present, in response to the power battery prices fall and the pressure of rising cost of raw materials, battery companies choose to further expand the production scale, extend the industrial chain and other way to reduce the cost of production..

Second, the industry development prospects

(1) High demand in the industry

In recent years, the change in energy technologies and emerging technology companies such as Tesla leads, the explosive growth of global new energy automotive industry. China's new energy automotive industry policy support, since 2015 has become the world's largest electric car market. In June 2017, further improve the system of new energy vehicles "double integral", clearly put forward 2018-2020 passenger car business of new energy vehicles integral scale requirements were 8%, 10% and 12% respectively. Recently, the ministry said it would further timetable for fuel car sales, for the new energy automobile industry development provides a powerful policy guarantee in the future. New energy car sales over the next four years will remain around 40% of the high growth, the upstream industry demand will continue to pull.

Power lithium battery is the core component of new energy vehicles, and demand is most affected by the production and sales of new energy vehicles. In recent years, China's lithium battery industry has developed rapidly, and the scale of production capacity of related enterprises has continued to expand. At present, there are hundreds of power battery companies in China, and the market size of the battery core exceeds 200 billion. In 2017, China's power lithium battery shipments reached 36GWh, a substantial increase of 29.4% year-on-year. It is expected that the compound growth rate will reach 20% in the next five years. China's lithium battery industry is facing an overall overcapacity and high-end production capacity shortage. The current industry has entered an accelerated reshuffle period. The main power lithium battery manufacturers are planning to expand on a large scale of capacity on the basis of the original, and the precision and automation rate of production equipment have With higher requirements, it is expected that the capacity upgrade of the lithium battery industry will accelerate in the future, and the market share will be further concentrated to leading enterprises.

(2) Favorable policies for power lithium batteries have been introduced frequently

Since the end of 2016, favorable policies for power lithium batteries have been introduced frequently. At the end of November 2016, the Ministry of Industry and Information Technology publicly solicited opinions on the "Regulations on the Standards of the Automotive Power Battery Industry" (2017), requiring that the capacity of the power lithium-ion monomer should not be less than 8GWh. On March 1, 2017, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology and the Ministry of Finance jointly issued a notice on the “Action Plan for Promoting the Development of Automotive Power Battery Industry”. The plan proposes that by 2020, the total capacity of power lithium batteries will exceed 100GWh, forming a leading enterprise with an annual production and sales scale of 40GWh or more.

Update and the national development and reform commission, the ministry of commerce issued by the foreign investment industrial guidance catalogue (2017 revision) ", not the power lithium battery in the encouraged projects, national protection on the development of power battery industry remains appropriate.

In addition, national policy, forward-looking guidance in "power battery recycling", such as the national standards committee released four power battery new GB, GB/T34014-2017 messages on power battery traceability, GB/T34013-2017 and GB/T33598-2017 for power battery recycling the technical details of specifications. Taken together, national policy for power battery industry as a whole reflects the "key support, appropriate protection and circulation" train of thought.

In this context, the survival of the fittest in the domestic lithium battery industry will be greatly accelerated, and the capacity expansion and equipment upgrade of mainstream lithium battery manufacturers have become the trend of the times.

Third, industry risk

(1) Cost risk

In the second half of 2017, the cost pressure of power battery companies increased sharply. Affected by factors such as the above-mentioned new energy vehicle financial subsidy standard and the increase in the recommended list threshold, lithium-ion enterprises are facing the predicament of “squeezing and pressing down”, and the gross profit margin of enterprises has dropped significantly year-on-year.

(2) Corporate financial pressure is huge

First of all, it comes from the "long payment days" and "gathering of pressure. Due to terminal car companies are often in a relatively strong position, power battery enterprises to get orders, will bear the brunt of the long payment days generally, other companies if you do not follow suit, is passive in the market competition.

(3) The policy risk

In 2018, the subsidy for new energy vehicles will fall 20% ahead of schedule. While the price of power batteries is further declining, the threshold of energy density and subsidy quota will be raised again. For example, the highest-grade subsidy corresponding to the energy density of the new energy passenger car battery system will increase from 115wh/kg to 135wh/kg, and the energy density of the new energy passenger car will increase from 120wh/kg to 140wh/kg. This makes most of the power battery products produced this year unable to meet the maximum subsidy requirements.

(4)Competition in the market risk

Foreign power battery enterprises did not relax attempt to expand China market. For example, in the case of industrial policy did not let go, Panasonic on the strategic cooperation with Beijing linkage physical, through the local raw materials, open the production situation, water under the premise of cost reduction for high technology.

Once is reduced, the cost of battery foreign enterprises competition will intensify battery, combined with the domestic battery significant overcapacity situation, some native battery enterprise survival situation will be worse.

Fourth, industry risk prevention

Due to the rising cost of upstream raw materials and the expansion of industrial power, the industry's lack of bargaining power on the downstream led to a significant decline in the profitability of the industry. However, in the medium and long term, China's power battery industry still has a very large space for growth. It is estimated that by 2020, the total demand for domestic power lithium batteries will be about 90GWh. By 2025, the demand for power batteries will reach 310GWh. Therefore, commercial banks can focus on power battery manufacturers with better capacity utilization and better product recycling. Priority is given to power lithium battery companies with leading technology and significant brand effects. Focus on the financial status and inventory of power batteries, to prevent the risk of corporate capital chain breakage.

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