Shock Wave Of "Crazy Expansion" Of Power Battery

China's new energy vehicle industry has entered a period of rapid development. According to the data of China Automobile Industry Association, in August this year, the monthly production and sales of new energy vehicles exceeded 300000 for the first time, a record high. In the first eight months, the production and sales of new energy vehicles reached 1.813 million and 1.799 million respectively, with a year-on-year increase of 1.9 times.

It is worth mentioning that the penetration rate of new energy vehicles has increased to 17.8% in August, and the penetration rate of new energy passenger vehicles is close to 20%. According to this development trend, China is expected to achieve the medium and long-term planning target of 20% market share of new energy vehicles in 2025 ahead of schedule.

The growth rate of new energy vehicles is faster than expected, and the demand for power batteries is also growing at a high speed.

According to the data of China automotive power battery industry innovation alliance, in the first eight months of this year, China's power battery output accumulated 111.5gwh, a year-on-year increase of 201.0%. China's power battery loading volume accumulated 76.3gwh, up 176.3% year-on-year. Among them, the loading volume of ternary battery was 40.9gwh, with a year-on-year increase of 111.2%; The loading volume of LiFePO4 battery was 35.2gwh, up 338.6% year on year.

With the rapid growth of new energy vehicle market demand, there is a gap in the supply of power battery. During the Chengdu auto show at the end of August, Yang Hongxin, chairman and CEO of honeycomb energy, revealed that at present, the battery orders of honeycomb energy have been arranged to next year, and the current battery gap in the industry is about 30% - 50%, and the supply shortage may last until 2025. A number of car companies have also expressed concerns about the insufficient supply of power batteries on different occasions.

In order to cope with the supply chain pressure brought by the electric transformation of the whole industry, since this year, power battery enterprises are actively expanding production capacity and building new battery factories throughout the country. Different from the layout of the first and second tier cities, many third and fourth tier local governments have higher enthusiasm in the new round of expansion of power battery enterprises. Among them, Sichuan, Jiangsu, Anhui, Guangdong, Jiangxi and other places are the most active.

However, there are still some problems in domestic power batteries, such as insufficient high-end products and overcapacity of medium and low-end products. At the same time, the power battery industry is also further concentrated to the leading enterprises. The development of the power battery industry will not be smooth and will still face many problems.

Large scale production expansion

The power battery industry is a well deserved wind outlet this year.

According to the incomplete statistics of 21st century economic report, since this year, many first and second line power battery enterprises, including Ningde times, BYD, AVIC lithium, Yiwei lithium, GuoXuan high tech, honeycomb energy, Funeng technology, etc., have announced new production expansion plans. Since this year, the planned new production capacity has exceeded 1000gwh, which is almost 10 times of the total amount of power battery loading this year.

It is worth noting that the main new production capacity this year is mainly the first and second tier enterprises, and the scale of investment has been expanded, and the amount of investment often exceeds 10 billion.

Ningde era, the leading enterprise, is one of the main enterprises to expand production this year. According to the semi annual report of Ningde times, the capacity of power battery and energy storage system in Ningde times is 65.45gwh, and the capacity under construction is 92.50gwh. In August this year, Ningde times launched a fixed increase of 58.2 billion yuan and planned a new 137gwh capacity project. According to the current public information, Ningde's production capacity will exceed 600gwh by 2025.

At the same time, the relationship between Ningde era and local governments is also closer. Zeng Yuqun, chairman of Ningde times, signed contracts everywhere and met with senior leaders of governments in Jiangsu, Sichuan, Jiangxi, Shanghai and Xiamen.

In February this year, Ningde times signed a cooperation agreement with the Guangdong provincial government. On July 14, Ningde times and Yibin municipal government signed an all-round deepening cooperation agreement to jointly build Ningde times southwest headquarters, production base, industrial ecosystem, international training center, new energy college and new energy industry fund. On August 18, Ningde times signed a strategic cooperation framework agreement with the Shanghai municipal government. Ningde times will launch related projects in Shanghai, including global innovation center, international functional headquarters, Future Energy Research Institute, and high-end manufacturing base. On September 13, Ningde times signed a cooperation agreement with Yichun Municipal government, which will build a new lithium battery production and manufacturing base project with a total investment of 13.5 billion yuan. At the same time, it will deeply explore the upstream and downstream of the industrial chain, sign a cooperation agreement with Yichun mining company, and sign a comprehensive strategic cooperation agreement with Hezhong new energy vehicles.

In the past August, BYD has successively added four battery companies, including Wuwei Fudi, Yancheng Fudi, Jinan Fudi and Shaoxing Fudi.

Among the second-line power battery enterprises, AVIC lithium battery, GuoXuan high tech and honeycomb energy have also made great strides in capacity expansion. In addition to expanding the production capacity of Changzhou and Xiamen bases in Jiangsu Province, AVIC lithium has announced plans for the construction of three new bases in Chengdu, Wuhan and Hefei this year, with an expanded capacity of more than 100GWh. According to the plan of AVIC lithium, the capacity will reach 200gwh in 2022.

Honeycomb energy has added a number of power battery projects in Suining, Huzhou, Ma'anshan, Lishui and Chengdu; Ganfeng lithium battery plans to invest 8.4 billion yuan to build a new type of lithium battery with an annual output of 15gwh in Xinyu of Jiangxi Province and Liangjiang New Area of Chongqing; At present, GuoXuan high tech, with a capacity of 28gwh, will adjust its previous capacity target of 100GWh in 2025 to 300gwh.

It can be seen that local governments are more active in introducing power battery projects, especially those of high-quality enterprises. And the prospects of these high-quality enterprises are indeed optimistic by the outside world, which may bring good tax and employment prospects to the local government in the future.

In addition to the pursuit of local governments, power battery enterprises have also become the favorite of capital. The investment center of new energy vehicle industry chain has been transferred from vehicle to upstream.

The share prices of several A-share listed companies, such as Ningde times, BYD, GuoXuan high tech, Yiwei lithium energy and Funeng technology, have soared. AVIC lithium introduced a number of strategic investors at the end of last year, and its registered capital increased from 6.99 billion yuan to 12.76 billion yuan. At the end of July, honeycomb Energy announced the completion of 10.28 billion yuan round B financing. Both enterprises are preparing for IPO.

The structure of the first and second echelons of the whole industry has become more and more clear, and the development pattern of power battery is also becoming clearer.

Bundling upstream

In addition to speeding up investment in the construction of battery production base, since this year, power battery companies are also increasing the competition for upstream raw materials.

Since 2020, the price of raw materials in the upstream of lithium battery has been maintained at a high level, and shows a continuous upward trend.

On September 16, Xin Guobin, Vice Minister of the Ministry of industry and information technology, mentioned at the third world new energy vehicle conference that the power batteries of new energy vehicles were facing the pressure of mineral resources such as lithium, cobalt and nickel and rising prices. Therefore, the Ministry of industry and information technology will work with relevant departments to speed up the overall planning and improve the support capacity of lithium cobalt nickel and other key resources.

One of the important reasons why power battery companies cooperate with different local governments is that they are interested in the local lithium resources.

In the cooperation between Ningde times and Yichun City, one of the contents is to build a lithium carbonate and other upstream material production base with Yichun mining company in Yichun. Yichun is known as the "lithium capital of Asia". According to the public information of Yichun Municipal government, Yichun, Jiangxi Province, has proved the available lithium oxide reserves of 2.6 million tons, accounting for 37.6% of the national reserves, equivalent to about 6.42 million tons of lithium carbonate.

There are also GuoXuan high tech in Yichun. In August this year, GuoXuan high tech reached a cooperation with Yichun Municipal government to invest in the construction of lithium carbonate projects in Yifeng and Fengxin. The project is expected to produce 100000 tons of lithium carbonate annually.

One of the reasons why honeycomb energy chose to build a power battery factory in Suining, Sichuan Province, is that Suining has rich lithium salt resources, which can provide the main source of battery production materials for honeycomb energy.

As power battery companies move towards a larger scale, the current supply chain may not be able to meet its demand for capacity growth. Therefore, this also forces the power battery enterprises to increase the layout of upstream resources and realize closer binding with the upstream, so as to ensure their future production, and ensure the supply chain security and cost control as much as possible.

The competition of head power battery enterprises is no longer the competition for orders of automobile enterprises, but will also expand to the upstream. Competition will intensify further.

Countermeasures of automobile enterprises

As the capacity expansion of power battery enterprises can not be implemented quickly, the "battery shortage" of new energy vehicles may continue in the face of huge battery demand. The game between automobile enterprises and battery enterprises will enter a new stage.

In the aspect of power battery supply system, automobile enterprises adopt different means to deal with it.

The first is to expand the scope of battery suppliers according to the traditional auto parts supply system. This will bring opportunities to high-quality second-line battery enterprises and Japanese and Korean battery enterprises that have coveted the power battery market of new energy vehicles in China for a long time.

Recently, according to South Korean media reports, SK innovation, a power battery supplier, has signed a battery supply contract with Xiaopeng automobile to supply 811 batteries for Xiaopeng battery. Before that, most of Xiaopeng's batteries were supplied by Ningde times.

The battery supply sources of BMW Group, an important partner of Ningde era, also include Yiwei lithium energy, Samsung SDI of South Korea and northvolt ab of Sweden. Yiwei lithium energy also had an affair with Tesla China, and AVIC lithium battery also replaced Ningde era as the main battery supplier of gac-ea'an.

The second way is to deeply cooperate with battery enterprises, including joint venture and strategic equity.

The joint venture is mainly the cooperation between domestic main engine plants and Ningde times, that is, Dongfeng, SAIC, GAC, FAW and other enterprises have established joint ventures with Ningde times respectively.

Strategic equity investment is mainly the cooperation between some large car enterprises and second-line battery enterprises. For example, Volkswagen shares in GuoXuan high tech, Daimler shares in Funeng technology, etc.

Under the condition that the products are basically stable, if the scale of automobile enterprises is pulled up, it is necessary and sufficient for both sides to form a stable supply by taking shares and holding shares in the second and third line battery enterprises. As for the development of the second-line battery enterprises, once they have the endorsement of large enterprises, it will be helpful to the value judgment of enterprises in the capital market or in the market competition.

The third is the self built factories of automobile enterprises. Volkswagen, Daimler, GM and other car companies have similar layout in Europe and the United States.

On September 7, conservative Toyota also announced plans to enter the electric market. Toyota plans to invest $13.7 billion in battery research and development, production and capacity improvement by 2030. Toyota aims to cut production costs by half by 2030, with annual global battery capacity of 200GW. In addition to developing a new generation of lithium-ion batteries, Toyota will also accelerate the development of solid-state batteries.

Of course, for automobile enterprises, there are a series of problems, such as technology accumulation, research and development, as well as certain risks. Volkswagen's approach is to maintain the battery supply relationship with the first-line battery enterprises, and at the same time, cooperate with the second-line battery enterprises to quickly supplement the technical shortcomings in battery chemistry and other related fields, and improve the capacity of self-produced batteries as soon as possible.

It is not without a successful precedent for auto companies to build their own battery capacity. The most representative one is BYD. However, BYD switched from the battery industry to the auto track.

The main problem that BYD is facing is that as early as 2018, BYD has put forward the plan of battery external supply, but at present, the progress of external supply plan is extremely slow. As more and more auto companies build their own factories or deepen the cooperation with second-line battery enterprises, BYD's battery supply road will face greater challenges.

Of course, for a long time in the future, the relationship between automobile enterprises and power battery enterprises will be a game in cooperation. Under the tide of production expansion, some people can ride the wind and others will be left behind on the way to catch up.